Vietinbank could retain profits in 2018 and 2019 to serve the capital hike plan (Photo: vietnamfinance.vn)Hanoi (VNS/VNA) - The Governmentsupports the policy of allowing four State-owned banks to raise chartercapital, said Governor of the State Bank of Vietnam (SBV) Le Minh Hung.
These four banks are Vietnam Bank for Agriculture and RuralDevelopment (Agribank), Vietnam Joint Stock Commercial Bank for Industry andTrade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Vietnam(Vietcombank) and Bank for Investment and Development of Vietnam (BIDV).
At a recent meeting reviewing last year’s performance ofVietinbank, Minh said four State-owned banks have contributed more than 92trillion VND (roughly 4 billion USD) to the State budget in the past fiveyears, of which 60 trillion VND was tax and 32 trillion VND was dividendpayments.
But these banks have not raised charter capital during thatperiod.
Minh said the Government has allowed the banks to increasecapital as they need more funds to ensure growth and provide capital to theeconomy to help maintain the country’s high economic growth.
He said Vietinbank could retain profits in 2018 and 2019 toserve the capital hike plan, but profits of 2019 and 2020need evaluation to be consistent with its business activities.
The Ministry of Finance is revising regulations to report tothe Government about the capital hike plan for these banks.
Minh said Vietinbank needed to report to the finance ministryabout its capital plans based on its 2019-20 growth and business results.
The Governor also said current regulations allow banks withmore than 50 percent of State capital to issue bonds to increase tier 2 capital(supplementary capital) without permission from the central bank.
In 2019, Vietinbank reported profits of nearly 11.5 trillionVND (496 million USD), up 26 percent over its yearly plan and up 83 percentcompared to 2018. By the end of the year, the bank had assets of 1.24quadrillion VND, up 6.5 percent compared to the previous year, whileoutstanding loans reached 952 trillion VND, up 7.2 percent.
Total deposits increased 5 percent to 892 trillion VND. Itsbad debt ratio was reduced to less than 1.2 percent from 1.59 percent in2018.
Vietinbank targets a 10 percent growth for pre-tax profitthis year on the basis of not raising capital. Total assets, loans and depositsare expected to growth by 6-10 percent.
However, in 2020, the Governor asked the bank to bettercontrol the growth of risky assets, quickly divest from non-performinginvestments in the past year and focus more on priority areas.
In addition, the bankmust reduce at least 30 percent of the internal bad debt and bad debt atVietnam Asset Management Company (VAMC).
Vietcombank and BIDV have yet to disclose business results ofthe whole year of 2019, while BIDV posted a record pre-tax profit of 10.8trillion VND last year./.
These four banks are Vietnam Bank for Agriculture and RuralDevelopment (Agribank), Vietnam Joint Stock Commercial Bank for Industry andTrade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Vietnam(Vietcombank) and Bank for Investment and Development of Vietnam (BIDV).
At a recent meeting reviewing last year’s performance ofVietinbank, Minh said four State-owned banks have contributed more than 92trillion VND (roughly 4 billion USD) to the State budget in the past fiveyears, of which 60 trillion VND was tax and 32 trillion VND was dividendpayments.
But these banks have not raised charter capital during thatperiod.
Minh said the Government has allowed the banks to increasecapital as they need more funds to ensure growth and provide capital to theeconomy to help maintain the country’s high economic growth.
He said Vietinbank could retain profits in 2018 and 2019 toserve the capital hike plan, but profits of 2019 and 2020need evaluation to be consistent with its business activities.
The Ministry of Finance is revising regulations to report tothe Government about the capital hike plan for these banks.
Minh said Vietinbank needed to report to the finance ministryabout its capital plans based on its 2019-20 growth and business results.
The Governor also said current regulations allow banks withmore than 50 percent of State capital to issue bonds to increase tier 2 capital(supplementary capital) without permission from the central bank.
In 2019, Vietinbank reported profits of nearly 11.5 trillionVND (496 million USD), up 26 percent over its yearly plan and up 83 percentcompared to 2018. By the end of the year, the bank had assets of 1.24quadrillion VND, up 6.5 percent compared to the previous year, whileoutstanding loans reached 952 trillion VND, up 7.2 percent.
Total deposits increased 5 percent to 892 trillion VND. Itsbad debt ratio was reduced to less than 1.2 percent from 1.59 percent in2018.
Vietinbank targets a 10 percent growth for pre-tax profitthis year on the basis of not raising capital. Total assets, loans and depositsare expected to growth by 6-10 percent.
However, in 2020, the Governor asked the bank to bettercontrol the growth of risky assets, quickly divest from non-performinginvestments in the past year and focus more on priority areas.
In addition, the bankmust reduce at least 30 percent of the internal bad debt and bad debt atVietnam Asset Management Company (VAMC).
Vietcombank and BIDV have yet to disclose business results ofthe whole year of 2019, while BIDV posted a record pre-tax profit of 10.8trillion VND last year./.
VNA
