Vietnam: HDBank makes strong market debut, opens 22% above IPO price

HDBank Vice President Nguyen Thi Phuong Thao

Vietnamese lender HDBank made a strong stock market debut on the Ho Chi Minh Stock Exchange (HOSE) Friday, opening at 39,000 dong ($1.72) a share or 21.9 percent higher than its initial public offering (IPO).

HDBank, the first bank in Vietnam to go public in 2018, raised $300 million in its 22 December IPO after selling around 21.5% of its shares at 32,000 dong apiece to over 76 foreign investors.

Among them were Germany’s Deutsche Bank AG, Japan’s Credit Saison Co, VinaCapital Vietnam Opportunity Fund (VOF) and JP Morgan Vietnam Opportunities Fund, who each own not more than 3 percent.

The bank, formally known as HCM City Development Bank, emerged from the IPO with a capitalization of nearly 32,400 billion dong or about $1.4 billion.

The valuation sends HDBank to the ranks of HOSE’s top 20 most capitalized stocks so far.

During the stock market debut ceremony, HDBank Vice President Nguyen Thi Phuong Thao said the bank is preparing the foundation for its 2017-2021 plan, where it expects to achieve an average annual growth rate of 25-37 per cent.

“Over the past 10 years, HDBank’s total assets have increased 18 times and we believe it will double its total assets by 2021,” she said.

The bank is also expected to serve 15 million customers by the end of the forecast period. It currently has 4.5 million individual customers and around 25,000 SME clients.

VOF Managing Director Andy Ho earlier expressed confidence that HDBank’s experienced management team can profitably grow the bank. VOF’s pre-IPO investment, which received regulatory approval, is close to $22 million.

“HDBank is one of the most innovative and fastest-growing retail banks in Vietnam today, and we are excited to be a part of the bank’s initial public offering,” Ho said.

Baker McKenzie, which advised HDBank on its IPO, said the bank’s $300-million IPO is the second largest deal in the Vietnamese banking sector history since Vietcombank’s $463-million IPO in 2007.

HDBank is the fifth bank in Vietnam to list its shares on the country’s stock exchanges after VIB, Kienlongbank, VPBank, and LienVietPostBank. It was established in 1989 and currently ranks among the top ten Vietnamese banks by asset base.

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