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By Mai Nguyen
HANOI, Oct 31 (Reuters) - Vietnamese lender BIDV wants to issue new shares to KEB Hana Bank, giving the South Korean bank a 15 percent in the company, it said in a document released on Wednesday seeking shareholders approval.
BIDV, Vietnam’s second biggest bank by market value, has sought strategic investors as the Southeast Asian nation tries to reform its banking sector which was once plagued with bad debt.
BIDV said it wants to issue 603 million shares to KEB Hana Bank in 2018 or 2019, or 17.65 percent of its current registered capital which after dilution will be worth 15 percent to KEB. At the current price, the planned BIDV share sale is worth $735 million.
Vietnam caps foreign ownership in local banks at 30 percent.
The State Bank of Vietnam (SBV), the country’s central bank, owns 95.28 percent of BIDV. After the planned share sale to KEB Hana, SBV’s ownership will be reduced to 80.99 percent.
BIDV intends to use the new capital for lending, investment and expanding its network. It expects profit before tax to be 9.3 trillion dong ($398.42 million) this year, up 7 percent from 2017, with bad debt out of total loans under 2 percent.
Shareholders will have until Nov. 15 to vote on the share sale.
$1 = 23,342 dong Reporting by Mai Nguyen; Editing by Christian Schmollinger