State ownership at Vietnam Bank for Agriculture and Rural Development (Agribank) will remain at approximately 65% in the upcoming period, after the bank launched its initial public offering (IPO), Giao Thong online news site reported, citing Deputy Prime Minister Vuong Dinh Hue.

Agribank headquarters is seen in Hanoi in a file photo. The State ownership will remain at least 65% at Agribank after the bank’s IPO – PHOTO: COUTERSY OF AGRIBANK

Deputy PM Hue confirmed the level of State ownership at a conference held on February 22 focused on developing the local stock market in 2019, saying that the prime minister earlier approved foreign ownership caps set at State-owned banks until 2025, with a vision toward 2030, in response to requests by investors to raise foreign ownership limits.

The level of State ownership at State-owned commercial banks will remain at least 65% from now until 2020. The "room" expanding for foreign ownership, a common term referring to the percentage of shares foreign investors can buy until hitting the government-imposed limit, will be taken into consideration after that, but State ownership at three State-owned commercial banks that underwent equitization will be kept at a minimum of 51%, he said.

Earlier, addressing the conference, Dominic Scriven, chairman of Dragon Capital, said that the room for foreign ownership on the local stock market is a matter of concern to many foreign investors. He proposed the Government reconsider an amendment to Article No.23 of Law on Investment, which stipulates that local firms that have foreign ownership of at least 51% will be recognized as foreign firms. The article was inappropriate and could trigger unfair competition among enterprises, he said.

As for foreign ownership caps at banks, the head of Dragon Capital suggested the Government allow foreign investors to raise their ownership limits to 49%, from the current 30%, since many banks have made efforts to raise capital to meet Basel 2 standard.

To date, three out of four State-owned banks have launched IPOs on the stock market, including the Bank for Foreign Trade of Vietnam (Vietcombank), the Vietnam Bank for Industry and Trade (VietinBank), and the Bank for Investment and Development of Vietnam (BIDV). The room for foreign ownership at these banks remains lower than 30% (compared to the ownership cap of 35%), with that recorded at BIDV remaining the lowest, below 5%.

SGT