Vietnam lender BIDV delays domestic share listing

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BIDV, Vietnam's largest partly private lender by assets, has delayed its domestic share listing because of difficulties in financial markets and a stock market slump, a state-run newspaper said.

Bank for Investment and Development of Vietnam (BIDV) also said demand for bank shares remained weak and a listing now would affect shareholders' interest, according to the Vietnam Economic Times newspaper.

The Hanoi-based bank's debut would be the biggest this year in Vietnam. The listing on the Ho Chi Minh Stock Exchange had initially been scheduled for June after the bank's initial public offering in December last year. In Vietnam, an IPO and listing are two separate processes.

"The bank would have no time to list this year and the government has agreed with the delay," a banking source familiar with BIDV's listing plan told Reuters. He did not elaborate.

Four years of economic volatility and sky-high inflation, coupled with tumbling asset prices, have put the Vietnamese banking system under strain.

The slowdown in economic growth, which the government forecast at 5.1 percent this year compared with an earlier target of 6.0 to 6.5 percent, has saddled businesses with rising debt and boosted the banking system's bad-debt ratio to 8.82 percent as of end-September.

BIDV said its bad debt rose to 3.29 percent of loans at the end of June from 2.96 percent in 2011.

Vietnam's banking system is expected to post credit growth of around 6 percent this year, a government official said early this month, slowing from an expansion of 14.41 percent in 2011.

BIDV posted lending growth of 10.83 percent at the end of June against December 31, 2011, compared with its target of 17 percent for the whole of 2012, it said in the prospectus issued in October when it secured the listing licence.

BIDV said its lending in 2011 expanded 16.8 percent from the previous year, while the capital adequacy ratio rose to 11.07 percent from 9.53 percent in 2009.

The VN-Index has fallen 20 percent from the year's high of 492.44 points reached on May 8.

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