Banks are under great pressure to hike capital to satisfy Basel II standards. (Photo Vietcombank)Hanoi (VNS/VNA) - The Government’s plans toincrease capital for large State-owned commercial banks in the first quarter ofthis year could be delayed due to the Covid-19 outbreak, analysts predicted.
The pandemic would also causeadverse impacts not only on business performance of listed firms but also theGovernment’s divestment plans from State-owned enterprises (SOEs), according toKB Securities Company (KBSV) analysts.
According to the Government’sroadmap, it would increase charter capital by 10 trillion VND (429 million USD)for Vietcombank and Vietinbank in the first quarter of this year.
As for Agribank, all its profitin 2020 will be used to increase capital instead of contributing to the Statebudget.
The State Bank of Vietnam(SBV), on behalf of the State, currently holds 74.8 percent of capital inVietcombank and 64.46 percent in Vietinbank.
Meanwhile, fully State-ownedlender Agribank is preparing to launch its IPO in the near future.
If failing to get the fundingin this quarter, the three banks could not meet Basel II standards this year asrequired by the SBV as well as be qualified to expand credit to supportthe country’s economic growth.
The banks are under greatpressure to hike capital to satisfy Basel II standards, which arerecommendations on banking laws and regulations issued by the Basel Committeeon Banking Supervision.
Under the SBV’s regulations,banks must maintain a capital adequacy ratio (CAR) of at least 8 percent as perBasel II norms starting in 2020. The CAR of State-owned banks will fail toreach the minimum level set by the SBV if they fail to increase capital.
Raising capital has been astruggle for Vietnamese banks in recent years. For example, Vietinbank – thefourth largest listed bank – has seen its capital remain unchanged since 2014at 37.23 trillion VND./.
The pandemic would also causeadverse impacts not only on business performance of listed firms but also theGovernment’s divestment plans from State-owned enterprises (SOEs), according toKB Securities Company (KBSV) analysts.
According to the Government’sroadmap, it would increase charter capital by 10 trillion VND (429 million USD)for Vietcombank and Vietinbank in the first quarter of this year.
As for Agribank, all its profitin 2020 will be used to increase capital instead of contributing to the Statebudget.
The State Bank of Vietnam(SBV), on behalf of the State, currently holds 74.8 percent of capital inVietcombank and 64.46 percent in Vietinbank.
Meanwhile, fully State-ownedlender Agribank is preparing to launch its IPO in the near future.
If failing to get the fundingin this quarter, the three banks could not meet Basel II standards this year asrequired by the SBV as well as be qualified to expand credit to supportthe country’s economic growth.
The banks are under greatpressure to hike capital to satisfy Basel II standards, which arerecommendations on banking laws and regulations issued by the Basel Committeeon Banking Supervision.
Under the SBV’s regulations,banks must maintain a capital adequacy ratio (CAR) of at least 8 percent as perBasel II norms starting in 2020. The CAR of State-owned banks will fail toreach the minimum level set by the SBV if they fail to increase capital.
Raising capital has been astruggle for Vietnamese banks in recent years. For example, Vietinbank – thefourth largest listed bank – has seen its capital remain unchanged since 2014at 37.23 trillion VND./.
VNA
