Previously, the dividend or bonus payment rate of banks was like a luxury item then, in 2018, shareholders will be “flooded” in dividends and bonus shares with the highest proportion ever.
Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has just organised the annual general meeting (AGM) to approve the usage of the entire more than 4.524 trillion dong profits and development investment fund in 2017 to make dividend payment at 30.22 percent. The dividend payment will be in shares and is expected to be carried out in Q2.
At the same time, VPBank takes the chartered capital supplementary reserve fund to make share bonus to shareholders at 1.03 percent, and the 2.489 trillion dong equity surplus and development investment fund to acquire more than 73.2 million shares with preferred dividends to be Treasury shares and then refund to shareholders at 3.65 percent. This plan is expected to be implemented in Q3.
In addition, in the fourth quarter of the year, the bank will also distribute bonus shares at 20.35 percent. The 4.577 trillion dong capital surplus came from the separate share issuance to investors in 2017.
Speaking at the meeting, VPBank vice Chair Bui Hai Quan said that after being approved by the State Bank of Vietnam (SBV), the bank will distribute the profit in the fastest way to shareholders. He also said that this is the highest dividend pay-out ratio ever recorded in both absolute proportion and value.
As the unit that always makes dividend payment to shareholders but at 5-10 percent only, this year, Military Joint Stock Bank (MBBank) raises the dividend payment ratio to 25 percent, the highest level ever including six percent in cash and 19 percent in shares.
Specifically, the bank made the first dividend payment in Q1/2017 in cash at six percent to shareholders in January. At the recent 2018 annual general meeting, the Board of directors will submit issuance method of 344.9 million shares, equal to 19 percent to existing shareholders, including five percent second round 2017 dividend and 14 percent bonus shares. The time that MBB expects to carry out will be Q2 and Q3. The dividend payment ratio for 2018 is minimum 11 percent.
36 percent is the expected dividend payment rate to shareholders of Vietnam International Joint Stock Commercial Bank (VIB). Accordingly, the bank will submit to shareholders at the 2018 AGM the plan to use 265.3 billion dong profit after making provision for funds to make five percent dividend payment to shareholders. Then, the bank will also plan to distribute bonus shares from supplementary capital reserve funds, development investment funds, retained earnings and equity surpluses. The bank said as of December 31, 2017, a source with a total value of 2.954 trillion dong can be partly or entirely used for capital increase purpose.
According to information from VIB’s media, the share bonus to shareholders by equity can be 31 percent.
Or, for a post-restructuring bank like Saigon Joint Stock Commercial Bank (SCB), there also have changes. SCB has just announced the content of the 2018 annual general meeting with the plan to use about 600 billion dong from the reserve fund to supplement the charter capital and retained earnings to increase charter capital, corresponding to the issuance volume of 60 million shares (4.2 percent on chartered capital of 14.295 trillion dong).
As such, this year’s dividends of banks are mostly stocks rather than cash. However, the outlook for the banking sector is very bright with the increasingly high share price in the market then the share bonus is clearly more beneficial to shareholders and also helps banks ensure that CAR is in accordance with Basel II standard.
The banking sector experienced a successful year 2017 with strongly increased business results and this is expected to continue in 2018. Banks that organised 2018 AGM or have announced documents for the meeting have shown the profit growth plan at more than 30 percent, even some units expect to achieve 50 percent.
Ranking the first in profit growth plan, Hochiminh City Development Bank (HDBank) targets to raise the 2018 total assets to 242.865 trillion dong (up 28 percent), the total mobilised capital at 222.184 trillion dong (up 31.6 percent), the total outstanding loans at 154.510 trillion dong (up 38 percent), the pre-tax profit at 3.921 trillion dong (up 62 percent); after-tax ROE at 20.2 percent and after-tax ROA at 1.3 percent.
In general direction, according to 2017-2021 plan, HDBank targets to achieve annual general growth rate at 25 percent, the profit growth at 37 percent/annum, the total asset to double, serving 15 million customers in 2021.
The aforementioned targets are set on the basis that the bank’s capital increased strongly last year, after separate share issuances as well as IPOs, earning $300 million from foreign investors.
Meanwhile, MBBank assesses the prospect of the banking sector in 2018 along with asset quality and capital source to increasingly improve, moving in line with positive aspects of the macro economy. Accordingly, MBB targets to earn the pre-tax profit of 6.8 trillion dong, up 47 percent from the previous year, compared to 6.5 trillion dong of the parent bank. The total targeted asset increased 11 percent to 347.6 trillion dong, the capital mobilisation swelled 11 percent and the outstanding loans improved 15 percent.
The solution to achieve the bank’s plan is to invest in the technology infrastructure capacity, carry out digital banking projects, pilot the automated trading model, invest in brand identity, and organise cross-selling between MBBank and other companies in the group more stringently.
Meanwhile, VIB’s business targets for the year 2018 included 2.005 trillion dong pre-tax profit, up 43 percent from 2017; 150.231 trillion dong total assets, up 22 percent; 100 trillion dong mobilised capital, up 22 percent; credit growth following the approval of the State Bank and the NPL ratio maintaining at less than three percent. VIB supposes that the macroeconomic context in 2018 is positive and that the momentum of the transition would create 2018 a promising year for banks to continue building scale and improving quality.
VPBank plans to attain the pre-tax profit at 10.800 trillion dong, up 33 percent year-on-year. Total assets, capital mobilisation and outstanding loans are expected to grow from 20 percent to 30 percent.
For VPBank, 2018 is an important milestone in the strategic phase of 2018-2022. As such, the bank aims at maintaining quality growth in key market segments, completing technology infrastructure and managing risks to meet strategic development requirements of digital banking. At the same time, the bank will also seek and select new business opportunities to capitalise on basic investment effectiveness, creating a new channel of income.
Nguyen Duc Vinh, general director of VPBank said VPBank’s target in the next five years is 6-7 trillion dong total assets and 25-30 trillion dong pre-tax profits.
Apart from VPBank, Vietnam Technical and Commercial Joint Stock Commercial Bank (Techcombank) also set the consolidated pre-tax target at 10 trillion dong, up 24 percent from the previous year. The total assets are planned to improve 17 percent, to 315.184 trillion dong. The mobilised capital swelled 40 percent to 246.318 trillion dong. The outstanding credit edged up 18 percent, to 213.582 trillion dong.
Techcombank said in 2018, the bank will focus on forming customer groups in the form of ecosystemvalue chain, targeting at effective customers in each segment to design and supply suitable products to raise revenue on each customer. At the same time, the bank will shift the structure of outstanding loans from wholesale to retail, focusing on short-term working capital loans and facilitating trade finance-related transactions, managing cash flows for customers.
