HDBank set to issue $500 mln worth of bonds, raise foreign ownership

HDBank is seeking its shareholders' approval to issue convertible bonds worth $500 million to international investors, and increase the foreign ownership ratio at the lender from 18% to 20%.

The joint stock bank expects to issue the bonds next year or in 2024, HDBank said in a release. Proceeds from the issuance would be used to expand its medium- and long-term capital, and serve its growth plans.

It would also help improve the bank’s asset quality indicators and capital adequacy ratio, making it ready to adopt Basel III standards. The Basel III accord increased the minimum Basel III capital requirements for banks worldwide.

HDBank issued convertible bonds worth $325 million in 2020 and 2021 to financial institutions like the World Bank’s investment arm International Finance Corporation, Affinity Equity Partners, DEG, and Leapfrog Investments, the HCMC-headquartered lender said. Bondholders may choose to convert their bonds into common shares of the bank.

HDBank reported a pre-tax profit of VND8,016 billion ($336.7 million) in the first nine months of 2022, up 31.7% year-over-year and fulfilling 82% of the year’s profit plan.

Its total operating income reached more than VND16,000 billion ($672.08 million) in the period, up 32.7%, with net interest income and non-interest income rising by 29% and 80.1%, respectively.

The lender’s current charter capital is VND25,303 billion ($1.06 billion).

The price of HDBank, listed on the Ho Chi Minh Stock Exchange as HDB was VND16,500 ($0.69) a share on Thursday.

Under Decree No. 01, the foreign ownership ratio must not exceed 5% of charter capital for an individual and 15% for an institution. The aggregate foreign ownership is capped at 30%.