Vietnam's Military Bank to ease foreign share cap from Friday

Reuters

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Motorcyclists ride past a branch of the Military Commercial Bank in Hanoi, Vietnam, February 18, 2016. REUTERS/Kham Motorcyclists ride past a branch of the Military Commercial Bank in Hanoi, Vietnam, February 18, 2016. REUTERS/Kham

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Military Commercial Bank, Vietnam's fourth biggest lender by market value, will offer foreigners a further 10 percent of its shares when it eases its existing cap from Friday, in a move an executive said would boost liquidity.
A state securities body confirmed the change in foreign ownership limit late on Thursday in a filing to the Ho Chi Minh City Stock Exchange. The move is expected to be a boon for the bank, which has seen its share performance limited by the 10 percent ceiling it imposes on foreign stakes.
Vice Chairman Luu Trung Thai earlier told Reuters in an email that the move aims at improving liquidity and "enhances the value of the bank and value for shareholders".
Thai said that no investors had been pre-selected.
Communist Vietnam allows foreigners to own up to 30 percent of domestic banks but Thai said the bank would hold on to the remaining 10 percent, which has been reserved for strategic investors, for now.
Shares in MB have been popular with foreign investors largely because the bank has a relatively low non-performing loans ratio compared to numerous lenders that are still struggling from when a tidal wave of bad debt hit the sector three years ago.
"(The move) seems to be an attempt to improve liquidity in the stock and perhaps enable existing bank holders such as Maritime Bank to reduce their stake below 5 percent," said Fiachra Mac Cana, managing director and head of research at Ho Chi Minh Securities.
Vietnam officially caps cross-ownership at banks at five percent, but unlisted Vietnam Maritime Commercial Bank now owns 8.96 percent in MB and Vietcombank holds 7.16 percent, Thomson Reuters data showed.

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