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OCB "moved" to plan on the floor for a long time but still has not done it. Photo: Internet

Many concerns and hesitations

For investors, banking stocks in Vietnam are still very attractive.Many stocks play a leading role in the market. Especially, in the last sessions of this year, the stock market is recovering to itspeak so it will be an opportunity for listed banks to attract investors. Moreover, in the context that banks have to "race" to meet the standards of capital adequacy ratio as prescribed, the listing will be an effective solution to increase capital.

However, many banks are still late for their official plans to go public. In July, Vietnam Thuong Tin Commercial Joint Stock Bank became the 18th bank to trade on the stock exchange with code VBB on UPCoM. Thus, if considering the whole year of 2019, only this bank will make the official transaction registration. The remaining banks are still in the process of either starting up, or applying for permission or not yet planning to go to the floor and are trading on the OTC decentralized market. So, in the shareholder meeting season in April, many banks had planned to list on the stock exchange such as MSB, ABBank, OCB, South Asia or SeABankat the end of the year or at latest next year. Because according to the regulations of the Ministry of Finance and the State Bank, the end of 2020 is the deadline for banks to make the listing on the official market.

Healthy but still "shy"

The business results of the banking sector in the first nine months of 2019 are very positive –most of them have good profit growth. For example, Vietnam Maritime Commercial Joint Stock Bank (MSB), the bank's shareholder meeting has planned to list shares on HOSE in the third quarter of 2019, but until now, it has entered the fourth quarter but has not done so. MSB's 9M2019 business results are quite good with profit growth of up to 267 percent. Specifically, by the end of September 30, 2019, the total assets of MSB increased by 7.7 percent compared to the end of 2018, reaching over VND 148 trillion. Good credit growth brought in VND 2,041 billion of net interest income in the first 9 months, up 27.8 percent over the same period last year. As a result, at the end of the 9-month period, MSB achieved a pre-tax profit of VND 1,064 billion, up 267 percent over the same period last year, and in the third quarter contributed VND 497 billion, an increase of 2,223 percent compared to the same period last year. NPL ratio was maintained at below 3 percent as prescribed.

Similarly, Orient Commercial Joint Stock Bank (OCB) has been planning the move for a long time but it has not been implemented yet. The reason given by this bank's leader is that because they want to find strategic shareholders or foreign shareholders who have the ability to increase their financial and management capacity, they have to delay the listing time to get the most effective plan and time for listing. This reason is considered to be quite "reasonable" because the bank's "health" is also quite good. By the end of September 2019, OCB's total assets reached nearly VND 106,412 billion, up 6 percent compared to the beginning of the year. Mainly thanks to interest and fee receivables increased by 32% compared to the beginning of the year, to over VND1,469 billion and customer loans increased by 21 percent to over VND67,976 billion. In the first 9 months, OCB's net profit increased by nearly 8 percent to nearly VND2,575 billion. However, the ratio of bad debts to outstanding loans of OCB increased to 2.62 percent compared to 2.29 percent at the beginning of the year.

In addition to many banks with good "health", there are still many banks withissues. At NamABank, although the bank's consolidated profit before tax was VND 574 billion by the end of September, up 22 percent year-on-year, bad debt increased by 91% to VND 1,496 billion, mainly due to group 3 debts (subprime debt) and group 4 debt (potentially irrecoverable debt). The ratio of bad debt to total outstanding loans of NamABank increased from 1.54 percent at the beginning of the year to 2.37 percent at the end of September. Or at Ban Viet Commercial Joint Stock Bank (Vietcapital Bank), in the last 9 months, this bank must increase sharply operating expenses by 27 percent over the same period last year, making total net profit before risk provision reach VND 100 billion, down 9 percent over the same period and 9 months decreased by over 32 percent to VND 287 billion. After a fairly strong risk provision, the bank recorded a profit before tax of VND 36 billion in the third quarter and VND 9 billion in 9 months, a decrease compared to the same period last year.

Some unlisted bank stocks traded on OTC market are still quite low. For example, ABBank's shares are being traded at VND 8,500 per share, MSB is VND 10,200 per share, NamABank is VND 8,000 per share, SeABank is VND 10,000 per share, Bao Viet Bank is VND 6,600 per share. But it has a great attraction when trading volume can reach 300,000 units. Therefore, pushing banks to the floor needs to be stepped up, to both make operations transparent and help strengthen the banks.