Wednesday, December 7 2016

VietNamNews

MoF pushes banks for cash dividend

Update: June, 03/2016 - 09:02
The Ministry of Finance (MoF) requested that the Bank for Investment and Development of Việt Nam (BIDV) and VietinBank (CTG) pay 2015 cash dividends to contribute to the State budget.— Photo zing.vn

HÀ NỘI — The Ministry of Finance (MoF) requested that the Bank for Investment and Development of Việt Nam (BIDV) and VietinBank (CTG) pay 2015 cash dividends to contribute to the State budget.

On Tuesday, local media released the MoF’s written request asking the central bank’s Governor Lê Minh Hưng to steer the two banks, both with major stakes of State capital, towards paying the 2015 dividend in cash. The banks announced more than VNĐ7 trillion (US$ 313 million) in profit in 2015 in their shareholders meeting in April and announced they would not pay dividends in cash. A year ago, both banks committed to pay a cash dividend of about 10 per cent.

While BIDV paid their shareholders 8.5 per cent of dividend in shares, Vietinbank, which earned VNĐ3.66 trillion in profit last year, decided not to pay any dividend at all.

The MoF said the decisions would influence the budget as the State is the largest shareholder in the two banks with 64.5 per cent of Vietinbank and more than 95 per cent of BIDV.

The MoF said under Article 23 of Decree 57/2012/NĐ-CP, commercial banks with more than 50 per cent of shares owned by the State have to consult the central bank and MoF for their dividend decisions.

The ministry added that under the Law No 69/2014/QH13, a joint stock company with more than two members must pay dividends corresponding to the State investment in the company to the State budget.

While BIDV has not made any comment on the request, Vietinbank general director Lê Đức Thọ said the bank was asking the MoF to drop the request, adding that it wanted to retain the profit to increase the bank’s capital.

Thọ said the bank needed to enhance its financial capacity to ensure that is was one of the State’s strongest banks. In the shareholder meeting last April, Thọ told Vietinbank’s shareholders that the bank would try to minimise additional investment from shareholders.

Thọ emphasised that non-State shareholders, particularly strategic shareholders, supported the plan. To the State shareholders, Thọ said the bank was trying to seek their support.

According to local media, Vietcombank (VCB), with 77 per cent of stakes owned by the State paid its shareholder a 10 per cent cash dividend for 2015. — VNS

 

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