ACB may sell first overseas bonds

Tuesday, April 22, 2008
Bank to dip toe into international debt market, maybe becoming the first Vietnamese firm to sell bonds abroad.
Asia Commercial Bank, the sole listed bank on the Hanoi market, plans to sell as much as VND3 trillion (US$186 million) of dollar-denominated bonds this year in its first overseas debt sale, said Chief Executive Officer Ly Xuan Hai.
“We want to start setting foot in the international markets,’’ Hai said in an interview from Ho Chi Minh City.

“The foreign currency-denominated bond sale needs to have Ministry of Finance approval but we want to do it as soon as possible.’’

He declined to give further details about the sale.

ACB, as the bank is known, is vying with Viet Nam National Textile and Garment Group and Electricity of Viet Nam to become the Southeast Asian nation’s first company to issue bonds abroad.

The State Bank of Viet Nam (SBV) has authorized ACB to sell VND6.5 trillion ($400 million) of bonds in total this year, the same as 2007, according to a statement dated last week posted on the central bank’s website.

Ho Chi Minh City-based ACB sold about VND4.5 trillion ($277.5 million) of local-currency bonds last year.

The lender was also authorized by the central bank to sell another VND2 trillion ($123.3 million) of securities, but didn’t because the permit expired, Hai said.

Slow lending

The central bank has told ACB to slow its lending after imposing a 30% cap on credit growth for the sector this year in an effort to control inflation, which is at a 12 year high.

The country’s fifth-largest lender by assets, should adjust its business plan along government’s instructions on measures to control inflation, the SBV said in a statement posted on its website.

ACB had forecast loans to grow 85% this year to VND59 trillion ($3.63 billion).

The statement gave no timeframe or any specific lending growth rate for ACB.

Last year Viet Nam’s credit growth was 54%, prompting the central bank to tighten money supply in the first quarter of 2008 as annual inflation hit 19.3% in March, the highest in more than 12 years.

ACB did not immediately comment last Friday but executives from the bank and several other Ho Chi Minh City-based banks have said the central bank should issue specific targets for individual banks because of their different financial strengths.

ACB said its asset growth was up in the first quarter, rising 17% from end of 2007 to VND100 trillion ($6.3 billion).

The lender nearly doubled its assets from a year ago to VND50.33 trillion ($3.1 billion).

It reported unaudited gross profit of VND501 billion ($31 million) in the first three months of this year, or 20% of its earnings forecast for the whole of 2008, it said in a statement on its website.

ACB gave no annual percentage change for first quarter profit but last year the lender reported pretax profit of VND413 billion ($25.8 million) for the first quarter of 2007.

The bank has projected its total assets will increase 69.8% to VND145 trillion ($8.99 billion) and loans will grow 85% to VND59 trillion ($3.66 billion) this year.

Standard Chartered owns 8.56% of ACB, the largest stake of four foreign shareholders which together hold a combined 30%. (Bloomberg)