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Moody's: Vietcombank's capital increase via stake sale is credit positive

Joint Stock Commercial Bank for Foreign Trade of Vietnam, or Vietcombank's move to raise 6.2 trillion dong in new capital via a stake sale is credit positive, Moody's said.

The rating agency said Jan. 10 that the capital increase will strengthen Vietcombank's capitalization and support credit growth, as well as bring the lender's capitalization more in line with other Vietnamese banks.

Vietcombank raised 6.2 trillion dong in capital by selling a 2.55% stake to Singapore's GIC Pte. Ltd., while Japan's Mizuho Bank Ltd. acquired additional 16,666,431 shares in the Vietnamese lender to maintain its existing 15% stake. Meanwhile, the government's ownership declined to 74.8% from 77.1%.

Moody's estimates that the additional capital will increase the bank's tangible common equity to risk-weighted assets ratio by about one percentage point to 8.4%.

As of Jan. 10, US$1 was equivalent to 23,200 Vietnamese dong.