Tuesday, September 25 2018


Vietinbank plans to raise charter capital

Update: February, 29/2012 - 10:25

HA NOI — VietinBank (CTG) will increase its charter capital this year from VND20.2 trillion (US$963 million) to VND30.8 trillion ($1.4 billion), an increase of over VND10 trillion, chairman Pham Huy Hung told the bank's annual shareholders meeting in Ha Noi yesterday.

Many shareholders wondered aloud whether such a substantial increase could be achieved, with the stock market in difficult circustances.

But Hung said the plan would call for charter capital to rise to VND26.2 trillion immediately from retained earnings on 2011 profits and the sale of shares representing a 9.6-per-cent interest.

Hung noted that Vietinbank expected to pay a 16-per-cent dividend on last year's profits, but the amount would be paid in shares, allowing an increase in treasury shares to be allocated towards charter capital.

Currently, the State holds 80 per cent of shares in Vietinbank, while domestic and foreign shareholders hold 10 per cent and the International Finance Corporation (IFC) the remainder.

Later this year, the bank would sell a 15-per-cent interest to a foreign strategic investor for an estimated VND4.6 trillion ($219 million), bringing charter capital to over VND30.8 trillion ($1.46 billion). By that time, the State would hold only 68 per cent and VietinBank would have two foreign strategic shareholders.

"To grow effectively will require raising capital to increase the scale of operations," Hung said.

Vietinbank's total assets at the end of 2011 were worth VND460 trillion ($21.9 billion), and the bank also planned to increase this figure to VND550 trillion ($27 billion) this year and $50 billion by 2015.

The bank has set a credit growth target in 2012 of only 17 per cent, down from 23 per cent in 2011, Hung said, and it has been in the process of restructuring its investment portfolios in key State projects, government bonds and construction bonds. — VNS

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