3 Min Read
* VietinBank assets surge 51 pct in 2010
* Sells 10 pct stake to IFC for $182 mln
* VietinBank has weak loan quality - Fitch (Adds details on IFC loan, ratings, VietinBank's shares)
HANOI, Jan 26 (Reuters) - VietinBank , Vietnam's top partly private lender, expects its total assets to rise by 50 percent this year after a surge of 51 percent in 2010, a state-run newspaper reported on Wednesday.
The Hanoi-based VietinBank would seek more loans over the next decade to boost its equity after borrowing $125 million from the International Finance Corporation (IFC), Chairman Pham Huy Hung was quoted by the central bank-run Banking Times newspaper as saying.
Hung's projection on the total assets in 2011 was higher than the 20 percent rise that VietinBank, or the Vietnam Joint Stock Commercial Bank for Industry and Trade, forecast earlier this month.
Shares in VietinBank were trading up 0.9 percent at 22,800 dong ($1.17) at 0209 GMT on Wednesday.
The loan, extended by the IFC and the IFC Capitalization Fund, lasts 10 years and two months and carries an interest rate on par with 6-month LIBOR plus 1.5 percent per year, Hung said.
"At present this rate is very good for Vietnam," Hung was quoted as saying in an interview with the newspaper.
"We expect (the total assets) continue to rise another 50 percent. That means we will need to increase equity to raise the CAR," Hung said, referring to the capital adequacy ratio.
He was speaking as VietinBank signed on Tuesday an agreement to sell 10 percent of stake to the IFC and its fund at a value of around $182 million, based on a joint statement.
On Monday Fitch Ratings affirmed VietinBank's Individual rating at 'D/E' and also affirmed Vietinbank's Support rating at '4'.
The ratings agency said "the affirmation reflected Fitch's concerns about Vietinbank's weak underlying loan quality and liquidity arising from excessively strong loan growth, and the bank's still weak capitalisation."
For text of Fitch Ratings, click on
The IFC Capitalization Fund is a global equity and subordinated debt fund founded by the World Bank's private sector lending arm IFC and the Japan Bank for International Cooperation. (Reporting by Ho Binh Minh; Editing by Muralikumar Anantharaman)