Vietnam’s OCB Expects a $1 Billion Market Value After Listing

(Bloomberg) -- Vietnam Orient Commercial Joint Stock Bank expects its market capitalization to rise to $1 billion after its planned listing on the country’s benchmark bourse during the second half of the year, according to Chairman Trinh Van Tuan.

The 22-year-old bank, also known as OCB, plans to list 750 million shares on the Ho Chi Minh City Stock Exchange late third quarter or early fourth quarter, said Tuan, who would not disclose the planned initial price.

The bank plans to sell 800 billion dong ($35 million) of shares to investors via private placement in the third quarter after issuing 14.2 percent of dividend shares and 20.5 percent of shares to existing shareholders, Tuan said in his Ho Chi Minh City office Friday. OCB expects to boost its registered capital by 50 percent to 7.5 trillion dong through the share issuances before its planned listing, the chairman said.

The lender also plans to offer as much as 25 percent of its shares to foreign investors before the listing, according to Tuan.

The bank is planning roadshows in Singapore, Hong Kong and London in June and July, Tuan said. It has garnered interest from multiple investors from Asia, Australia and Europe, he added. Tuan declined to provide a share price.

“We are one of a few high-growth and good private banks in Vietnam that have more than a 25 percent stake available to foreign investors,” he said. Vietnam’s strong economy and stock market is providing the bank an opportune time to seek investors, Tuan said.

OCB’s listing would make it the fourth Vietnamese bank to list on the nation’s major exchange this year, following HDBank, Tien Phong Bank and Techcombank, which plans to trade shares on the Ho Chi Minh City Stock Exchange next month.

Banking peer Tien Phong Bank had a similar goal after its Vietnam listing -- getting its value to at least $1 billion in the fourth quarter. A month after its listing, its market cap is sitting at about $715.9 million. This comes at a time when the Vietnam benchmark index has lost almost $20 billion in value since its April 9 record as investors sold equity holdings to buy into new issues and stockpile cash.

Even so, Bank for Foreign Trade of Vietnam, known as Vietcombank, last month sold 6.67 million shares of Orient Commercial Bank through a public auction at an average price almost double the initial offering of 13,000 dong per share after receiving oversubscribed bids, according to the Hanoi Stock Exchange.

OCB targets annual profit growth of 50-60 percent beginning in 2019, Tuan said. The bank sees 2018 pretax profit doubling to 2 trillion dong, according to the chairman, who with family holds nearly 18 percent of the lender’s shares. The bank this year targets expanding total assets by 37 percent to 116 trillion dong and restricting non-performing loans below 2 percent, less than the government’s overall banking sector target of below 3 percent.

To contact the reporter on this story: Mai Ngoc Chau in Ho Chi Minh City at cmai9@bloomberg.net

To contact the editors responsible for this story: John Boudreau at jboudreau3@bloomberg.net, Divya Balji

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