Banks listing busily: Some highly increased and others fell

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The banking system has paid attention to the stock exchange to have more profit for development. Photo: Internet

Listing busily

As of the beginning of June 2018, nearly 1.17 billion of TCB shares of Techcombank were listed on the Ho Chi Minh Stock Exchange (HOSE), with the reference price of 128,000 per share. This is the highest listing price of a banking share group. But in the first session, TCB shares declined about 20% to VND 102,400. After a few sessions of “on the list” but sometimes, “on the peak”, currently, TCB shares are being transacted at VND 105,000/share in the unstable situation of increase and decrease.

Previously, in the first half of April, TPB of TPBank was officially listed on the HOSE with the reference price of VND 32,000/share. But after the sharp increase in first session, in the next sessions, the TPBank’s share price fell to VND 28,000/share.

The sudden increase and decrease of share prices do not concern and prevent the busy listings of banks. Accordingly, from the beginning of the year, it is expected that a series of banks will list on the stock exchange in 2018, such as ABBank, OCB, Saigonbank, Nam A Bank, Viet A Bank. Recently, at the Maritime Bank Shareholders' General Meeting, it is also expected to list on the HOSE in the first quarter of 2019.

Currently, 17 commercial banks have listed on the stock exchange and are considered as “king share group” by the financial sector due to the positive growth rate, greatly contributing to the overall growth of stock indexes. In the end of the first quarter of 2018, many banks reported their revenue up by hundreds of VND billion, much higher than the same period in 2017.

According to the report on business results in the first quarter 2018 of 14 listed banks and of Viet Dragon Securities Joint Stock Company (VDSC), total income and profit before tax respectively reached VND 56,340 billion and VND 20,126 billion, increasing by 35% and 52% compared to the same period. Hence, the experts of the Company said that banks could exceed the business target in this year.

The business results of listed banks have shown that due to the forecast of dramatic growth rate of business results and profit, the listing on the stock exchange created expectations for these banks. TPBank achieved a net profit of VND 513 billion, 2.4 times higher than the same period in 2017 (VND 215 billion). The leaders of TPBank believed that they shall complete the profit target of VND 2,200 billion, a sudden increase of 82.42% compared to the same period in 2017. The business results of Techcombank in the first quarter of 2018 recognized a net profit of VND 2,049 billion, doubling the same period in 2017.

Some shares highly increased and others fell

However, for the correlation between shares of the banking sector groups will show the difference, many shares of banks dramatically increased but some banks are still being transacted below price. For example, SHB code of Saigon-Hanoi Commercial Joint Stock Bank, after reaching VND 14,000/share, in the first half of May 2018, the share of this bank fell to VND 10,000/share. Meanwhile, NVB share price of National Citizen Bank has never reached VND 10,000/share, currently the price of NVB shares are VND 7,500/share.

In fact, the financial statements from these banks showed that there have been many shortcomings such as asset quality, bad debt and business situation. For example, although SHB Bank’s business profit before tax in the first quarter reached VND 502 billion, increasing by 60% compared to the same period in 2017, the debt quality analysis showed the increase in the debt volume and bad debt volume. Specifically, notable debt increased from over VND 3,200 billion in the end of 2017 to over VND 5,068 billion; bad debt increased from over VND 2,760 billion to nearly VND 2,900 billion in the end of March 2018.

Besides, many banks are fixed price and expected high growth. Typically, Vietcombank- the state-owned bank, has received a lot of expectation from investors because it has many advantages in mobilizing capital, massive liquidity and strong credit growth. With positive signs, VCB shares are expected to have high growth in the coming time.

Banks aim to up capital ahead of new standards Prosperous business performance and positive bank share price trends in the stock market are expected to help ...

In the present context, the policies of management agencies have encouraged and facilitated for banks meeting standards and promoting the listing progress as the target set out. It is the issuance of specific and full mechanisms and normative legal documents on handling bad debt and banking restructure. Thereby, the banking system will be expanded in improving operation and attracting investors. Hence, many investors are concerned that the listing on the stock exchange will cause difficulties for their operation when they have to meet many strict standards on capital security and transparency system. Currently, the listing has become a target to professionalize and standardize the system, and enhance the reputation with investors and customers.