Bank stock revival stokes purchasing fire
Tran Hoang Ngan, member of the National Assembly's (NA) Economic Committee, asserted, “The positive recovery of bank stocks might be the outcome of well-sorted non-performing loans (NPL) which regained investors’ trust in financial institutions (FIs) as well as in the country’s economy.”
“On the other hand, the NA previously approved NPL-tackling resolutions resulted in the possibility of the annual interest rate being deducted by 1 per cent in the short run, which reassured investors in the prospects of the banking industry,” Ngan added.
Addressing the emerging wave of investment in FIs, the team of stock market analysts at Ho Chi Minh City Securities Corporation (HSC) specified that, “The bank stock index saw a climb of 30.7% over the year.
The motive for this upsurge was the substantial betterment of FIs’ profitability. Until this point of the year, a long list of FIs, including Ho Chi Minh Development Bank (HDBank), Sacombank, Orient Commercial Bank (OCB), LienVietPostBank, Asia Commercial Bank (ACB), Vietnam Prosperity Bank (VPBank), and Vietnam Technological and Commercial Bank (Techcombank), outperformed their initial profit targets for the entire year.”
Likewise, speaking about the recovering price of bank stocks, Dr. Bui Quang Tin, lecturer at the Business Administration Department of Banking University of Ho Chi Minh City, asserted, “Bank credit witnessed positive recovery over the first 11 months of 2017, reaching approximately 15.3% up against the same period of 2016. Hence, the liquidity rate of the banking system achieved stability after the surge, along with the steady low-level interest rate of 21% and the excessively low loan loss reserves.”
Having anticipated the revival of bank stocks in 2018, a great deal of bank leaders were recently reported to conduct huge stock purchases from their own FIs.
Specifically, Duong Cong Minh, chairman of Sacombank (STB), purchased a total of 1.2 million STB shares for VND220 billion (US$9.6 million) within the past two months.
Pham Doan Son, permanent vice chairman of the Board of Directors (BOD) and director general of LienVietPostBank (LPB), was recorded to own a total of 12.3 million LPB shares after the latest purchase of 500,000 shares.
Sovico JSC added to its current ownership of 38.5 million shares at HDBank, while Nguyen Thi Phuong Thao, HDBank’s vice chairwoman, extended her ownership to over 17.6 million shares.
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