Economy
PM issues directive on e-invoice implementation
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| State-owned commercial joint stock banks will be allowed to keep dividends to increase their charter capital, instead of paying them to the State budget. — Photo vaytiennganhang.net |
Viet Nam News
HÀ NỘI — State-owned commercial joint stock banks will be allowed to keep dividends which are supposed to be paid to the State budget so that they can increase their charter capital, State Bank of Việt Nam’s (SBV) Governor Lê Minh Hưng was quoted as saying.
In a recently released report on State ownership in enterprises, the Politburo said this decision is aimed at improving the financial capacity of State-owned banks, Hưng told Thời báo ngân hàng (Banking Times).
The State currently holds stakes in Agribank, BIDV, Vietinbank, Vietcombank, Construction Bank, Ocean Bank and GP Bank.
Till now, banks have not been allowed to keep their dividends. Representatives of State capital at State-owned banks often require to vote for dividend payout to be in cash at the banks’ annual general meetings (AGM) so that the State receives money from dividends.
In 2015, for example, the finance ministry received VNĐ2.7 trillion (US$120.96 million) in dividends from BIDV as the State held 95.28 per cent of BIDV’s charter capital.
In the 2017 AGM season, Vietcombank, VietinBank and BIDV have so far made dividend payments in cash following the demand of majority shareholders, including the finance ministry, at 7-8 per cent.
The Politburo’s allowance will help banks increase their capital to meet the requirements of Basel II, which is due to take effect in Việt Nam this September, as part of a pilot programme in 10 banks. The remaining banks will follow two years later.
To meet Basel II requirements, banks have been trying to increase capital, but it has been tough. This year, 16 banks announced plans to increase capital by a total of around VNĐ37 trillion.
Analysts said that despite their efforts, banks would find it difficult to increase their capital as bad debts remain the greatest hurdle, making investors apprehensive of putting their money in banks.
The Politburo’s report said the State would continue holding capital in Agribank, BIDV, Vietinbank and Vietcombank, with a controlling stake of not less than 65 per cent. This is an important factor in strengthening their potential and playing a dominant role in regulating the operations of the State-owned commercial banks, the Poliburo said. — VNS
