A Vietcombank branch in Hanoi. (Photo:VNA)Data from the State Bank of Vietnam (SBV) showed that by the end of 2022, thecharter capital of the whole banking system reached 876.99 trillion VND, up13.04% over the same period last year.
The charter capital of State-owned commercial banks was 190.43 trillion VND, anincrease of 5.75% over the same period in 2021 and the number of joint-stockcommercial banks was nearly 469.41 trillion VND, an increase of 19.26% over thesame period in 2021.
In a recent report sent to the National Assembly’s Economic Committee, the SBVsaid it is coordinating with relevant ministries and branches to consider andsubmit to the competent authorities a plan to increase charter capital fromprofits after tax and after setting aside funds in the 2021-23 period forState-owned commercial banks Vietcombank, VietinBank and BIDV; and from theState budget for Agribank.
At the same time, the SBV also directed Vietcombank, VietinBank and BIDV todevelop a plan to increase charter capital from profits after tax and aftersetting aside funds in 2021 to submit to the Prime Minister for approval.
As for Agribank, the Government on April 25 issued a resolution on additionalinvestment in charter capital for the bank. Accordingly, the SBV’s Governorwill be authorised by the Prime Minister, on behalf of the Government, toreport to the National Assembly on charter capital addition by 17.1 trillion VNDfor Agribank in the 2021-23 period.
In order to prepare for the capital increase plan, at the general meeting ofshareholders in 2023, Phạm Quang Dung, chairman of Vietcombank, saidVietcombank's capital increase plan of about 27 trillion VND will be from threesources including profit in 2020 and the remaining profit of 2019 with theissuance rate of 18.1% approved by the Government; profit of 2021; and theremaining accumulated profit before 2018.
Vietcombank’s capital increase policy was agreed upon by the SBV and theMinistry of Finance. The bank is preparing procedures to submit to thecompetent authorities for approval.
In 2023, BIDV plans to increase its charter capital to more than 61.56 trillionVND by issuing nearly 642 million shares to pay dividends to shareholders. Thesource for implementation is the remaining profit in 2021 after setting asidethe required funds. Accordingly, the bank’s charter capital will increase bymore than 6.42 trillion VND; private placement or public offering of more than455 million shares according to a plan approved by the bank’s 2022 annualgeneral meeting of shareholders (AGM).
VietinBank's AGM also approved a plan to increase charter capital in 2023. Ifthe capital increase plan is successful, VietinBank's charter capital willincrease from 48.06 trillion VND to 66.03 trillion VND.
According to the SBV’s data, by the end of January 2023, four State-ownedcommercial banks Agribank, Vietcombank, VietinBank and BIDV will have a totalcharter capital of 180.4 trillion VND. With the charter capital increase plans,if successfully implemented, the charter capital of the State-owned commercialbanks will increase sharply in 2023.
Meanwhile, the race to increase capital in joint stock commercial banks is moreexciting as many banks have planned to increase their charter capital bytrillions of Vietnamese dong. For example, VPBank is expected to increase byabout 12.2 trillion VND to bring its charter capital from 67.43 trillion VND tomore than 79.34 trillion VND.
In order to achieve the goal of increasing capital, at the AGM, VPBank leaderssaid they would issue more than 1.19 billion shares to strategic shareholderSumitomo Mitsui Banking Corporation and issue more than 30.2 million shares ofemployee stock ownership plan (ESOP). After the issuance, VPBank will becomethe bank with the largest charter capital in Vietnam’s banking system.
TPBank's 2023 AGM also approved a plan to increase charter capital to 22.01trillion VND. Specifically, the bank plans to increase charter capital bynearly 6.2 trillion VND to 22.01 trillion VND through dividend payment inshares.
At Military Bank (MB), the bank’s AGM also approved a plan to increase charter capitalin 2023 by more than 9 trillion VND. If the plan is favourable, the chartercapital of MB will increase from 45.34 trillion VND to 53.68 trillion VND.
The 2023 AGM of VIB also ratified a plan to increase charter capital fromnearly 21.07 trillion VND to 25.37 trillion VND. With the additional chartercapital, VIB plans to use 4.09 trillion VND to provide credit and invest inliquid assets, 100 billion VND to invest in facilities and technology, and 100billion VND to invest in branch network upgrading.
SHB's AGM in 2023 also approved a plan to increase charter capital from 30.67trillion VND to more than 36.19 trillion VND, while SeABank, ACB, HDBank,Techcombank and Bac A Bank also plan to increase their charter capital by morethan 5.5 trillion VND, 5.06 trillion VND, 3.97 trillion VND, 35.22 trillion VNDand 9.9 trillion VND, respectively.
Experts said raising capital has always been the top priority of banks inrecent years. Therefore, if the capital increase plans are successfullyimplemented, the charter capital of commercial banks will increase sharply in2023. High charter capital will be a good buffer to help banks have moreresources to cope with difficulties and expand business activities besides supportingthe economy and firms./.
VNA
