HDBank held its annual general meeting in HCM City on Saturday. The lender has identified 2020 as the year to accelerate digital transformation. — Photo the courtesy of HDBank

HÀ NỘI — The HCM City Development Joint Stock Commercial Bank (HOSE: HDB) plans to pay a dividend of 65 per cent for 2019, 50 per cent in stocks and 15 per cent in bonus shares.

The lender announced this at its annual general meeting in HCM City on Saturday.

The charter capital of HDBank, as it is known, will increase from the current VNĐ9.8 trillion to nearly VNĐ16 trillion after the dividend payment.

The bank aims to increase its charter capital to meet the State Bank of Việt Nam’s requirements to improve its financial capacity to develop its client network, expand market share and business scale, diversify banking services, and improve risk management capability.

The bank also aims to supplement its medium- and long-term capital, enhance its infrastructure, and build a headquarter with a modern information technology system.

This year HDBank expects its total assets to increase by 33 per cent to VNĐ305 trillion, deposits to VNĐ275 trillion, up 35 per cent, and loans outstanding to VNĐ178 trillion.

It targets an increase of 13 per cent in pre-tax profit.

Return on assets and return on equity will remain at high levels of 1.69 per cent and 20.02 per cent.

To achieve the targets, this year, besides credit growth and expansion of its network, HDBank will also focus on increasing income from services and cross-selling products and offering new products and services to customers.

According to Lê Thị Băng Tâm, its chairwoman, 2020 is a key year in the bank’s five-year (2017-2021) development plan.

“HDBank identified 2020 as the year to accelerate digital transformation, enhance technology application on the big data platform and digitise processes, distribution channels, products and services, and its entire activity.

“This is a decisive innovation step in the context that the world is struggling to contain the COVID-19 pandemic, restore business activities and normalise social life.”

At the meeting the board of directors also submitted a plan to issue up to US$1 billion worth of bonds in the international market in tranches.

The bond will have a minimum term of three years and a maximum of 10 and be issued to investors outside the US and listed on the Singapore Stock Exchange.

The bank also plans to issue $500 million worth of convertible bonds in the international or Vietnamese market with a term of five years in 2020 or 2021.

With its current scale, it is imperative for HDBank to participate in the international bond market, Nguyễn Thị Phương Thảo, the bank’s vice chairwoman, said.

“Currently, due to the influence of the COVID-19 pandemic, the governments of many countries have injected a lot of money into the international market at astonishingly low interest rates, even 0 per cent. So we believe that this is an opportunity to mobilise capital for the bank's recovery plans and investment projects.”

Thảo also revealed plans to convert HDBank’s consumer finance arm HDSAISON from a limited company to a joint stock company and launch an initial public offering.

At the meeting, the board of directors announced the dismissal of supervisory board member Nguyễn Thị Phụng, and her replacement by Đường Thị Thu.

It was also announced that the supervisory board for the 2017-2022 term would have a minimum of three members instead of the previous four.

In the first quarter of this year HDBank’s total consolidated operating income increased by 27.8 per cent year-on-year to VNĐ3.15 trillion. Pre-tax profit rose by 13.5 per cent to VNĐ1.25 trillion.

The non-performing loans ratio of the parent bank continued to be closely controlled, with its 0.98 per cent rate placing it among the banks with the lowest ratios in the industry.

To mitigate COVID-19 risks, HDBank has adopted measures to ensure safe operations. Besides, it has rolled out credit packages to support SMEs, businesses that produce and distribute essential products and others in supply and distribution chains to help them overcome the tough situation.

In April 2020 Moody’s retained its B1 credit rating for HDBank though it had said earlier many banks were likely to have their ratings lowered.

It underlined HDBank’s stable financial capacity, low risk and long-term development opportunities.

Also in the first quarter HDBank was honoured as the best domestic bank in Việt Nam by The Asset, Asia’s leading banking and finance magazine. — VNS