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Banking & Finance

NCB looks to foreign investors to double capital

Released at: 10:10, 03/05/2017

NCB looks to foreign investors to double capital

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National Citizen Bank met with foreign partners already in bid to raise charter capital.

by Anh Duy

The Hanoi-based National Citizen Bank (NCB), one of the smaller lenders in Vietnam, is looking for injections of capital from foreign investors to double its registered capital to VND6.01 trillion ($264.7 million) next year, its annual general meeting last month heard.

This year the bank will focus on improving its business model, enhancing its risk management capacity, and expanding its customer and partner ecosystems. It will select foreign strategic investors among its partners that are interested in adding VND3 trillion ($131.9 million) to its charter capital.

The bank’s net profit from operating activities is expected to reach VND350 billion ($15.4 million) this year, a 60 per cent increase against 2016, while its bad debt ratio is to be kept at less than 3 per cent. The State Bank of Vietnam (SBV) has approved the bank’s plan to open six more transaction points.

Last year, it successfully implemented changes to its core banking system, which is a prerequisite for modernization. The system has helped the bank improve its ability to offer multiple services, simplifying and closely controlling professionals as well as managing customers’ information. It has oriented towards a strategy of becoming a friendly financial consultant that accompanies individual customers and businesses and provides products for each particular customer. It has continued to improve its operational model as well as diversify its loan portfolio and mobilization to ensure reasonable, stable, safe and effective costs.

Its latest financial report shows that total assets were VND70 trillion ($3.1 billion) as at the end of 2016, for growth of 43 per cent against 2015. Capital mobilization and lending also recorded high growth, hitting over VND18.5 trillion ($813.26 million) and VND8.9 trillion ($391.24 million), respectively.

2016 revenue totaled VND211 billion ($9.3 million); 91 per cent higher than in 2015. Net profit was VND10.84 billion ($480,000), up 67 per cent. The quality of its balance sheet improved and the ratio of bad debts was less than 3 per cent.

Ms. Nguyen Thi Mai, a member of NCB’s board and its Director of Finance, said the bank had held talks with a number of partners from Japan and South Korea that have expressed interest in becoming strategic investors.

According to independent board member Mr. Le Xuan Nghia, the ambitious capital hike plan is feasible and the bank hopes to find suitable strategic partners this year.

NCB has signed a deal with a large US bank, which will advise it on finding strategic shareholders, Mr. Nghia said, adding that four or five foreign firms have conducted due diligence.

The Hanoi Stock Exchange-listed NCB, formerly known as Navibank, was once identified as one of the weakest banks in Vietnam and is still in the middle of a restructuring plan.

The Vietnamese Government curbs foreign holdings in a local bank at 30 per cent. A foreign strategic investor is allowed to own up to 20 per cent.

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