A Vietcombank transaction office (Source: VNA)Hanoi (VNA) - The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) expects to increase its charter capital this year to become more competitive and prepare for Basel II implementation.
The Hanoi-based bank said it would submit a plan to increase its capital at its shareholders' meeting for approval due on April 15 this year. However, the bank did not reveal the details of the plan.
The bank will also present its performance results in 2015 as well as plans for 2016 to its shareholders.
Vietcombank currently has charter capital of 26.650 trillion VND (1.21 billion USD). Its last capital increase was in the third quarter of 2014.
The bank, with total assets worth 673.910 trillion VND as of the end of last year, reported pre-tax profit of more than 6.6 trillion VND in 2015.
It aims to increase its total assets by 13.5 percent to reach 765 trillion VND this year.
To prepare for the capital increase plan, Vietcombank has signed a contract with Credit Suisse and the Vietnam International Law Firm (VILAF) for a new equity issue, under which Credit Suisse will act as the finance consultant for the bank, while VILAF will be responsible for the legal aspects.
Vietcombank General Director Pham Quang Dung said the equity issue would help the bank increase capital, keep pace with the strong economic growth and maintain its leading position in the banking system.
The equity issue also aims to help the bank prepare for the implementation of Basel II, which is a new and higher level for Vietnamese banks in accordance with Basel Accords standards set by the Basel Committee on Banking Supervision, this year.
Vietcombank is among 10 banks that have been chosen by the State Bank of Vietnam (SBV) to apply Basel II governance standards.
However, to implement the standards, many banks such as Vietcombank must increase their capital as their capital adequacy ratio (CAR) would fall. Banks that have CAR of about 9 percent will have to increase their capital to meet the Basel II standards.-VNA
