Monday, October 22 2018

VietNamNews

Banks allowed to raise charter capital

Update: October, 09/2018 - 16:47
TPBank is recently allowed to increase its charter capital. - Photo vneconomy.vn
Viet Nam News

HÀ NỘI — The State Bank of Việt Nam has allowed Tiên Phong Bank (TPBank) and Bản Việt Bank (Viet Capital Bank) to increase their charter capital through share issuances.

According to the approval of the central bank last week, TPBank would increase its charter capital from the current VNĐ6.718 trillion (US$292 million) to VNĐ8.566 trillion by issuing shares as dividend payments from undistributed earnings and bonus shares from capital surplus for existing shareholders.

Accordingly, TPBank would issue nearly 185 million shares in this charter capital increase, equivalent to 28 per cent of the bank’s total shares.

In August, TPBank completed the charter capital increase from VNĐ5.842 billion to VNĐ6.781 billion.

As of September 30, the bank reported a pre-tax profit of VNĐ1.613 trillion, nearly doubling that of the same period of 2017 and equivalent to 75 per cent of the bank’s full-year target.

Early this month, the central bank also gave the nod to Viet Capital Bank to increase its charter capital from VNĐ3 trillion to VNĐ3.5 trillion by issuing 50 million shares for existing shareholders at the ratio of 6:1 (meaning that shareholders with six existing shares would have right to buy one new share).

Viet Capital Bank’s charter capital has been maintained at VNĐ3 trillion from 2011.

From the beginning of this year, the central bank approved charter capital increases of more than 10 banks’ foreign branches, including Vietcombank, Vietbank, Kiên Long Bank, Orient Commercial Joint Stock Bank, Techcombank, Military Bank, VPBank, HDBank and Woori Việt Nam.

Raising charter capital is one move for banks to meet Basel 2 standards.

The State Bank of Việt Nam previously asked banks to develop plans for charter capital increases to meet the Basel 2 capital adequacy ratio by 2020. — VNS

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