Listed banks to pay high dividends

March, 16/2021 - 08:17

Some listed banks have planned to pay a surprisingly high dividend rates this year.

 

Shareholders of Saigon Hanoi Commercial Joint Stock Bank (SHB) can receive dividend at a rate of up to 20.5 per cent this year. — Photo courtesy of SHB

HÀ NỘI — Some listed banks plan to pay surprisingly high dividend rates this year.

Bank for Investment and Development of Việt Nam (BID) plans to issue 207.3 million shares to pay 2019's dividend at the rate of 5.2 per cent.

It will also issue another 281.5 million shares to pay 2020's dividend at a rate of 7 per cent. The issuance time is scheduled for Q3 and Q4 this year, BID announced during its shareholders' meeting held last Friday.

Earlier this year, the bank used more than VNĐ3.2 trillion (US$138.7 million) to pay dividend in cash at a rate of 8 per cent. The payout was made in early February.

Việt Nam Maritime Commercial Joint Stock Bank (MSB) plans to increase its charter capital from VNĐ11.75 trillion to VNĐ15.28 trillion via issuing shares to pay dividends.

This bank is expected to issue 352.5 million shares to pay dividends in 2020, equivalent to a maximum rate of 30 per cent.

MSB also said that it plans to pay 2021's dividend in 2022 at a minimum rate of 15 per cent.

Early this year, Việt Nam's Orient Commercial Joint Stock Bank (OCB) announced that it would pay 2020's dividend in shares at a rate of 25 per cent in order to increase charter capital.

Two large State-owned banks, Vietcombank (VCB) and VietinBank (CTG), may also pay dividends in shares this year after Decree 121/2020/ND-CP is amended, allowing State-owned joint stock banks to pay dividends in shares.

At the end of 2020, VietinBank consulted shareholders and approved a plan to increase its charter capital to nearly VNĐ48 trillion through the issuance of more than 1 billion shares to pay dividends, at a rate of nearly 28.8 per cent.

Vietcombank paid cash dividend at a rate of 8 per cent in January 2021. This bank will submit to shareholders the plan to increase charter capital in 2021-2022, most likely to pay dividends in shares.

Shareholders of Saigon Hanoi Commercial Joint Stock Bank (SHB) plan to pay 2019's dividend at a rate of 10 per cent.

It has also submitted to shareholders the plan to pay 2020's dividend at a rate of 10.5 per cent. Thus, SHB shareholders can receive dividend at a rate of up to 20.5 per cent this year.

After completing the dividend payment, SHB's chartered capital will increase to nearly VNĐ21.3 trillion, equivalent to an increase of 21 per cent compared to the current charter capital.

Raising charter capital is within SHB's development roadmap with the aim of improving financial capacity, investing in modern information technology systems and improving safety ratios according to Basel II standards.

SHB has managed to pay dividends regularly over the years, especially in the period when the bank had to put all its resources to handle the backlog of the merger with Habubank.

In the 2013-2016 period, the bank paid dividend at 7-8 per cent. For the 2017-2020 period, the rate was 10 per cent or more. In 2017 and 2018, it paid a dividend rate of 20.9 per cent. As for 2019 and 2020, it plans to pay dividend at a rate of 20.5 per cent, with payout to be conducted in 2021.

SHB targets profit this year to rise more than 70 per cent to reach VNĐ5.8 trillion.

Banks often prioritise paying dividends in shares in recent years in order to supplement charter capital and serve business activities. Shares of banks have risen strongly in the past few years, making dividend payments in shares more favourable.

Due to the impact of the COVID-19 pandemic, the State Bank has asked commercial banks not to pay dividends in cash to reduce costs and to reserve money to support people and businesses affected by the crisis. — VNS

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