SHB to raise capital to US$832 million

June 16, 2020 - 09:39
The bank will issue bonus shares at a rate of 10 per cent in the third or fourth quarter of the year to raise capital.


An SHB office. The bank plans to increase capital to US$832 million in 2020. — VNA/VNS Photo Trần Việt

HÀ NỘI — Sài Gòn-Hà Nội Joint Stock Commercial Bank (SHB) plans to increase charter capital to VNĐ19.3 trillion (US$832 million) in 2020.

The bank will issue bonus shares at a rate of 10 per cent in the third or fourth quarter of the year to raise capital.

Every shareholder will receive one bonus share for every 10 shares they have.

SHB on May 6 completed issuing 500 million new shares to raise its capital to VNĐ17.558 trillion.

Of the income brought by the share issuance, SHB will spend VNĐ400 billion upgrading its technological background and expanding its office network.

The rest of the income will be spent on enlarging its lending capacity.

SHB will keep increasing its capital in the future to strengthen sustainability and financial health, Chairman Đỗ Quang Hiển told the bank’s annual shareholder meeting on Monday.

No cash dividend also means more money for the bank to settle VNĐ1 trillion worth of VAMC bonds that SHB owes to the Vietnam Asset Management Company, he said.

A total of VNĐ6.08 trillion worth of non-performing loans (NPLs) are set to be recovered this year.

There are challenges to come this year because of the COVID-19 pandemic, he said.

“Local companies, especially exporters, will still be struggling to recover after the crisis is over.”

The coronavirus crisis has made SHB more cautious with its earnings target this year.

In 2020, SHB expects total assets will rise by 11.8 per cent year-on-year to VNĐ408.45 trillion and deposits will gain 16 per cent year-on-year to VNĐ334.64 trillion.

Total lending is expected to grow by 15 per cent year-on-year to VNĐ306.12 trillion and pre-tax profit is projected to move up only 8 per cent year-on-year to VNĐ3.27 trillion.

Pre-tax profit has been cut from the previous forecast, which was expected to rise 41 per cent year-on-year to VNĐ4.35 trillion.

In the first five months of the year, SHB recorded VNĐ1.3 trillion worth of pre-tax profit.

Participants at the meeting also discussed SHB’s plan to give up part of its ownership in SHB Finance Company (SHBFC).

The Board of Directors plans to sell part of the bank's shares at SHBFC to foreign investors. The deal must be passed by the State Bank of Vietnam (SBV).

The divestment deal is expected to boost SHB’s income and help the bank reach international markets.

The bank also plans to move its shares to the Hồ Chí Minh Stock Exchange from the Hà Nội Stock Exchange.

SHB shares (HNX: SHB) fell 1.2 per cent to end Monday at VNĐ15,800 apiece. — VNS