Vietnam's private lender BVBank to offer 68.98 mln shares to existing shareholders

BVBank will offer 68.98 million shares to existing shareholders at VND10,000 apiece, which is lower than the book value level recorded at the end of 2024 (VND11,153).

The creditor, formerly known as Viet Capital Bank and registered on the unlisted public companies market (UPCom) as BVB, has received the State Securities Commission's approval to make the public offering.

BVBank aims to mobilize nearly VND700 billion ($27.37 million) to supplement its lending capital. The expected time of use is 2025, depending on customers' actual disbursement needs and the maximum credit growth limit regulated by the State Bank of Vietnam (SBV) for the bank.

In 2023 and 2024, the lender achieved credit growth of 14% and 18% respectively, and plans to maintain the growth momentum this year.

Shareholders who own one share will have one right and for every eight rights, the shareholder will be able to buy one share. After the issuance, the bank will expand its chartered capital to more than VND6,200 billion ($242.4 million).

On the market, BVB shares are trading at VND13,800 ($0.54) apiece. In the second half of January and February, the stock recorded a strong increase in price, up from VND11,300 to VND15,000, and then adjusted to the current price range.

This means the offering price is lower than the bank's book value as of December 31, 2024, which was VND11,153, and lower than the current trading price.

Strong capital hike, profit recovery

BVBank, formerly known as Gia Dinh Commercial Joint Stock Bank and later Viet Capital Bank, was established in 1992.

The bank had strong development in the period of 2008-2011 when it increased its capital from VND1,000 billion to VND3,000 billion ($117.3 million).

2011 was a turning point as the bank changed its name to Viet Capital Bank, focusing on the goal of becoming a multi-functional retail bank, targeting individual customers and small and medium-sized enterprises; and accelerating its digitalization.

After more than 12 years of almost standing still, in 2023, BVBank came back to its capital hike plan, raising the chartered capital from VND3,671 billion to VND5,016 billion ($196.13 million) and being among small-scale banks in the market.

This year, the bank once again changed its logo and brand identity to BVBank.

In July 2024, the SBV, the central bank, allowed BVBank to increase its charter capital by VND1,391 billion to over VND6,400 billion ($250.2 million).

In addition to the offering to shareholders, the bank also issued 50.1 million bonus shares (implemented in August 2024) and 20 million ESOP (Employee Stock Ownership Plan) shares.

The bank recorded a strong recovery in 2024 after a year of rock bottom. Profit after tax reached VND311 billion ($12.16 million), 5.5 times higher than 2023 and the second highest level in its history (after 2022).

The driving force came from credit growth of 18%, with customer loans amounting to VND68,063 billion. The bad debt ratio was at 3.09%, down 3.3% compared to the previous year.

The bank said the 2024 results were mainly due to the first quarter, when lending activities increased sharply which accounted for nearly 40% of the year's credit growth.

Debt collection accelerated, rising nearly 3 times the average of previous quarters. Interest income saw strong improvement, while there was reduction in provisioning costs.