Customers at a Vietcombank branch in HCM City. — VNA/VNS Photo Hoang Hai
HÀ NỘI Viet Nam News -— The largest local commercial bank, Vietcombank (VCB), will increase their charter capital to over VNĐ39.7 trillion (US$1.78 billion), said chairman Nghiêm Xuân Thành at the bank’s general shareholder’s meeting yesterday.
Thành said the added capital of VND9.3 trillion was from the issuance of 933 million bonus shares at the rate of 35 per cent for the existing shareholders of the bank.
VCB will then offer about 360 million shares or a 10 per cent stake to foreign investors in a private placement. He said that after raising the charter capital, the dominant share of the State would reduce from 77 per cent to 70 per cent. Mizuho Bank, the second largest shareholder of the Bank, is considering participating in the private placement to at least maintain the current ownership level at the bank.
The chairman said that by the end of Q1, the VCB’s capital source had increase by 2.7 per cent, higher than the average growth in the banking industry. Chairman Thành said despite offering the lowest interest rates in the market, its brand and competitive products helped the bank’s capital to grow.
Credit within the quarter also increased by 6.5 per cent, while the non performing loans (NPL) ratio was down slightly by 1.76 per cent from the beginning of the year. The bank also reported profits before tax of VNĐ2.3 trillion, up 61 per cent over the same quarter last year.
By the end of 2015, the total assets of the bank had reached VNĐ674 trillion, up 16.9 per cent compared to the beginning of the year. The total profits before tax reached VND6.8 trillion. This year, VCB expected to earn VNĐ7.5 trillion in profits, a 10 per cent increase from 2015.
Shareholders of Vietcombank have already received a 10 per cent cash dividend worth VNĐ2.7 trillion for 2015, and the bank plans to pay a dividend of 10 per cent in cash this year as well.
The bank also planned to pay 0.35 per cent of its profit margin to its director board and supervising board this year. So with the target of VNĐ7.5 trillion, leaders of the bank were expected to have a combined income of VNĐ26.5 billion this year.
Even before the additional capital, the bank already was the largest bank in charter capital in Việt Nam with VNĐ112.7 trillion, second only to Vinamilk on the Vietnamese stock market.
However, Vietcombank said it did not just aim to be the No 1 bank in Việt Nam, but also to be placed in the top 300 financial banks with the best management in the world by 2020.
With more capital, the bank said it would spend VNĐ1 trillion in infrastructure investment including the construction of office buildings, expanding its network and upgrading technology. It would also spend VNĐ500 billion investing in its existing companies as well as in other profitable projects.
The bank also plans to spend VNĐ11.5 trillion expanding credit activities, capital venture projects and other business activities. The bank would establish companies specializing in credit, remittance and research the establishment of an asset management company, as well as open more branches and representative offices in foreign countries.
The bank said it would also consider spending on M&A activities this year.
Currently, Vietcombank holds a 7 per cent stake in Military Bank (MBB), an 8.2 per cent stake in Export and Import Bank (EIB), a 5 per cent stake in Orient Commercial Bank (OCB), a 4.3 per cent stake in Saigonbank and more than a 10 per cent stake in Cement Finance Company.
The bank said it would keep the investment in MBB because of its effective business, adding that it would not divest in either OCB or in Saigonbank as the investment of VNĐ100 billion in the banks was quite small compared to their total assets. Meanwhile, it also planned to find mergers in order to boost the strength of the bank.
Yesterday, VCB shares rose 0.5 per cent to end at VNĐ42,500 each on the HCM Stock Exchange. — VNS