Securities companies gear up for capital increase

SSI Securities Company (SSI) has announced its intention to seek shareholders’ approval for a plan to issue 453 million shares to increase its charter capital from equity sources. Photo SSI

HÀ NỘI – The competition to increase capital among securities companies is showing signs of excitement once again in the second half of 2023, amid the context of continuous growth in outstanding margin loans over the past few quarters.

According to statistics, it is expected that at least five securities companies will raise their charter capital in the near future, with a total value of approximately VNĐ13.4 trillion (US$553 million). The primary purpose of this capital increase is to supplement lending activities, along with investments and other objectives.

In particular, LPBank Securities Company (LPBS) recently announced a plan to offer shares to its existing shareholders. Under this plan, LPBS will offer a maximum of 363.8 million shares at a price not lower than VNĐ10,000 per share, with a subscription ratio of 1,000 shares for every 14,552 shares held.

If the plan is fully executed, LPBS’s charter capital is expected to increase nearly 16 times, from VNĐ250 billion to VNĐ3.88 trillion. With a minimum revenue target of over VNĐ3.6 trillion, the company plans to allocate VNĐ500 billion for self-trading investment activities, VNĐ200 billion to expand its branch network in major provinces and cities, and the remaining VNĐ2.94 trillion for lending activities in margin trading, advances for securities sales, and other securities business services.

SSI Securities Company (SSI) has announced its intention to seek shareholders’ approval for a plan to issue 453 million shares to increase its charter capital from equity sources. This includes issuing 302 million bonus shares at a ratio of 100:20 and offering 151 million shares to existing shareholders at VNĐ15,000 per share, with a ratio of 100:10. If the aforementioned plan is successfully implemented, SSI’s charter capital is expected to reach VNĐ19.65 trillion, solidifying its position as the leader in terms of charter capital among securities companies.

Furthermore, SSI has stated that the plan to issue over 104 million individual shares will be carried out after the completion of the aforementioned capital increase plan. Therefore, if successful, SSI’s charter capital could potentially increase to nearly VNĐ20.7 trillion.

In August 2023, VNDirect Securities Co (VND) had previously announced its plan to conduct a public offering of shares to existing shareholders and issue shares as dividends. VND intends to offer nearly 244 million shares to existing shareholders at a ratio of 5:1, with an offering price of VNĐ10,000 per share. The implementation is scheduled for 2023 and/or 2024, pending approval from the State Securities Commission (SSC).

VND also plans to distribute dividends to shareholders in the form of shares at a rate of 5 per cent, equivalent to issuing nearly 61 million new shares. The capital for implementation will be sourced from undistributed after-tax profits in the 2022 audited individual financial statements.

If both of the aforementioned options are successful, VND’s charter capital will increase from VNĐ12.17 trillion to nearly VNĐ15.22 trillion.

Tiên Phong Securities (TPS) plans to implement an issuance plan to increase its charter capital from VNĐ2 trillion to VNĐ3 trillion by offering 100 million shares to existing shareholders at a ratio of 2:1, with an offering price not lower than VNĐ10,000 per share.

It is expected that with VNĐ1,000 billion in revenue, TPS will allocate VNĐ700 billion for securities trading activities, VNĐ200 billion for capital investment activities, and VNĐ100 billion for business activities and other legal operations.

Techcom Securities Company (TCBS) has announced a capital increase plan of over VNĐ10 trillion, while MB Securities Company (MBS) has finalised the right to issue over 57 million shares to increase its capital to VNĐ4.3 trillion.

Additionally, ACB Securities (ACBS) also plans to increase its capital by VNĐ1 trillion, reaching VNĐ4 trillion. The contributed capital will come from the parent bank, Asia Commercial Bank (ACB).

In the backdrop of continuously growing outstanding loan balances at securities companies over the past few quarters, there is a notable trend among many of these companies to rapidly increase their capital.

As of September 30, 2023, statistics indicate that outstanding loans, primarily margin loans, at securities companies are estimated to reach VNĐ165 trillion. This represents an increase of VNĐ15 trillion compared to the end of the second quarter of 2023 and a substantial rise of VNĐ43 trillion compared to the end of 2022.

The significant surge in outstanding loans at securities companies can be attributed to their recent efforts to bolster their capital in order to meet the high demand from the market, particularly in terms of loan agreements with various organisations. This move reflects the companies’ proactive approach to cater to the increasing market needs and capitalise on the opportunities presented by the growing demand for loans. VNS