ASEAN KEY DESTINATIONS
Techcombank plans $231m share buyback
The Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) on Saturday proposed that its shareholders approve a share buyback plan that will take place in 2017.
As reported by online newspaper Ng??i ??ng h?nh, the bank plans to purchase more than 221.9 million shares, equal to 25 per cent of its total outstanding shares, from current shareholders and keep those as treasury shares.
According to the draft plan that has been sent to shareholders, the buyback order will be offered to all current shareholders of Techcombank.
The buyback plan was made as the bank had posted positive earnings for years. The plan may help Techcombank indirectly pay dividend to its shareholders without putting its operation and business in jeopardy. Techcombank’s business strategy for the last several years is to use its profit to re-invest in business activities, and not to pay dividends.
The buyback price will be decided by the management board, but it must stay above VN?23,445 (more than US$1) per share and above the average share price that is calculated by at least two brokerages within 60 days prior to the date of submitting the buyback proposal to the State Securities Commission.
Techcombank is expected to spend at least VN?5.2 trillion ($231.1 million) to buy back the2 21.9 million shares if the buyback price is at the lowest level of VN?23,445 per share.
At the end of March, the bank recorded VN?232.5 trillion in total assets and VN?20.65 trillion in equity ownership capital.
Among shareholders of Techcombank is British multinational banking and financial services company HSBC, which owns 19.4 per cent of the Vietnamese bank’s charter capital.
The two financial institutions began their cooperation in 2005 and HSBC raised its ownership in Techcombank to the current level in 2008, becoming the first foreign bank to hold one-fifth stake in a Vietnamese bank.
On Thursday, Techcombank’s management board approved an agreement that allows HSBC to withdraw its entire stake in the Vietnamese bank.
Techcombank has also postponed its plan to increase charter capital to VN?14 trillion to carry out the share buyback plan. The capital-increase plan will be finalised later in 2017.
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