The HCM City Development Joint Stock Commercial Bank (HDBank) has decided to lock the foreign ownership limit at 21.5 per cent of the charter capital.
The limit was set at 21.5 per cent so that there is more room to sell stakes to the strategic investor, HDBank said in a statement on Monday.
Under existing regulations, foreign ownership limit at banks is 30 per cent of the charter capital.
HDBank also plans to offer US$160 million worth of international convertible bonds to institutional investors in developed markets.
The bonds will mature in five years and one day. The bonds can be converted into common shares, are non-guaranteed and go without covered warrants.
Income raised from the bond sale will be spent increasing the bank’s tier 2 capital. Tier 2 refers to a bank's supplementary capital and includes undisclosed reserves, debts and hybrid financial products.
With the capital raise, HDBank will increase funding for medium-term and long-term loans and reach its business targets. In addition, the bank will be able to meet requirements of asset quality and capital adequacy ratio.
Amid the COVID-19 pandemic, rating agency Moody’s has kept its B1 rating for HDBank, acknowledging that the Vietnamese lender has progressed well to improve the quality of assets and capital competency, and make sustainable profitability.
HDBank shares are listed on the Ho Chi Minh Stock Exchange as HDB. Its shares slid 1.7 per cent to VND29,200 ($1.26) apiece, having gained a total 24 per cent since July 27. — VNS