BNP stake in Vietnam's Oricombank may double

VNStockNews.com - Vietnam's Oricombank, 10% owned by BNP Paribas, could sell up to another 10% of shares to its French shareholder by year end, Oricombank's chief executive was quoted in a report as saying.

The share sales of 5% to 10% was part of the Ho Chi Minh City-based lender's plan to raise its registered capital by 35.6% to 2 trillion dong ($112 million), Tran Van Vinh was quoted by Thanh Nien (Young People) daily as saying.

The unlisted Oricombank, or Phuong Dong Commercial Joint Stock Bank (OCB), would conduct the capital boost "by December 2009 at the latest", Vinh said in an interview with the paper.

An Oricombank official, who declined to be identified, confirmed the bank's plan to sell the stake to BNP, adding that the lender was working with the central bank for an initial sale of a 5% stake.

Viet Nam caps foreign ownership in a domestic bank at 30% with a 15% limit for a strategic investor. A foreign strategic investor could own 20% subject to government approval.

So far, only HSBC Holdings Plc has been given such approval to own 20% in Hanoi-based Techcombank.

Vinh said in the interview that Oricombank has projected to raise its gross profit this year to 255 billion dong, keep bad debt at less than 3% of loans and ensure a 10% dividend payment.

He forecast the Vietnamese dong's depreciation against the dollar this year could be higher than 5% or 6%, given a rising consumer price index and Vietnam's deficit in its balance of international payments.

In April Oricombank reported its 2008 net profit dropped 61% to 65.03 billion dong due to higher costs and losses from investments in securities.

Vietnam's largest partly private bank, Vietcombank VCB.HM, is among the largest shareholders of Oricombank, now owing an 8.69% stake. (Reuters)