National Citizen Bank plans to double charter capital via private share placements

Vietnam's National Citizen Bank (NCB) has approved a plan to issue 620 million shares via private placements in the second quarter of 2024 to double its charter capital to VND11.8 trillion ($486.5 million).

The shares are expected to be issued once in 2024, unlike the previous plan for several phases lasting three years. The privately placed shares will be restricted from transfer for one year.

If the issuance is successful, NCB's charter capital will increase from VND5.6 trillion ($230.88 million) to VND11.8 trillion, placing it in the group of banks with charter capital of VND10-20 trillion, behind Eximbank and Sacombank.

The plan to sharply increase charter capital was launched after NCB welcomed a new shareholder to engage in its restructuring process.

In March last year, NCB offered nearly 150 million shares to Sun Group through its subsidiary - Sun Group Investment Limited Liability Company. Senior personnel of this group have taken turns assuming leadership roles at the bank. In mid-2021, Bui Thi Thanh Huong replaced Nguyen Tien Dung as NCB chairman.

Now in the process of restructuring, NCB is among banks with a bad debt ratio of over the regulatory 3%. By the end of the third quarter of 2023, the bank had suffered a loss of more than VND230 billion ($9.48 million) due to a sharp increase in credit risk provisions and operating costs.

In the third quarter, NCB recorded a decrease of VND47 billion ($1.94 million) in after-tax profit compared to the same period last year.

As of September 30, total assets at NCB had reached VND91.6 trillion ($3.77 billion), up 2% compared to the beginning of the year. Of which, loans were valued at more than VND51.1 trillion ($2.1 billion), up VND3.39 trillion from December 31, 2022.

NCB shares, listed on the Hanoi Stock Exchange (HNX) as NVB, closed Thursday at VND10,300 ($0.42) per share.