BNP Paribas to buy 5 pct more in Oricombank

Wednesday, April 23, 2008
Viet Nam's Oricombank, 10% owned by France's BNP Paribas, said on Wednesday it would issue 20 million new shares this year to allow its French partner to increase its ownership to 15%.

The Ho Chi Minh City-based bank, also known as Phuong Dong Commercial Bank, will also sell part of the new shares to other foreign investors, it said in a statement after shareholders approved business targets for 2008 on Tuesday.

Oricombank gave no dates for the share issue. BNP Paribas has said it wants to double its stake in Oricombank to 20%.

Viet Nam caps foreign ownership in a domestic bank at 30%, with a 15-percent limit for an individual strategic investor. Any individual strategic investor needs government approval to increase its stake to 20%.

At a meeting on Tuesday, shareholders also agreed to slow profit growth and lending after Viet Nam's central bank imposed a cap on credit growth for the sector this year in an effort to control inflation.

Oricombank's statement said the bank's gross profit would grow only 36% this year to 315 billion dong ($19.7 million) and loans were projected to rise 32%.

Last year Oricombank reported its audited gross profit jumped 63.3% to 231 billion dong as lending surged 62% to 7.56 trillion dong.

The bank's new growth target compared with growth of 72% projected in February, and is more in line with the State Bank of Vietnam's tighter money supply policy as it seeks to control inflation at a 12-year high.

Vietcombank, the country's third-largest bank by assets and the first among its 5 state-run banks to conduct an initial public offering last December, owns 8.7% in Oricombank.

Top brewer Saigon Beer Alcohol Beverage Corp (Sabeco) has a 5-percent stake in Oricombank.

Oricombank said, apart from the share issue for BNP Baribas and outsiders, the lender would also issue 36.34 million new shares to existing shareholders as part of a plan to raise its registered capital by 53% to 1.7 trillion dong this year.

The bank would also issue convertible bonds to raise 600 billion dong this year to existing shareholders.

The bank has not said if it was going to list shares in 2008. (Reuters)