At the Annual general Meeting (AGM) in 2018 of Vietnam Prosperity Commercial Joint Stock Bank (VPBank), Bui Hai Quan, vice Chair of the bank’s Board of directors said that with the plan of steady business growth annually, raising equity and charter capital is an essential requirement to ensure the safety ratios for the bank.
Accordingly, the plan to increase charter capital to meet the needs in business and operation includes raising medium and long-term capital to serve the credit growth demand, improving the capital safety and operating safety ratios, contributing capital in subsidiaries or contributing capital in other business fields which can support and promote the operation of the banks, and investing in infrastructure to serve the development needs of the bank’s headquarter and network.
The plan to increase charter capital of VPBank, according to Quan, will be divided in five phases, in which the second phase is the share issuance under the employee stock ownership plan (ESOP) at 10,000 dong per share. The total issuance volume is 33,695,094 shares, equivalent to 336,950,940,000 dong, about 4.14 percent of the consolidated pre-tax profit of the bank in 2017.
“In the past 10 years, as VPBank has no preferential programmes for employees and the business results over the years have been very good, it should be partly shared to employees to encourage them to continue increasing efficiency and responsibility at work. At the same time, associating employees’ interests with the banks’ performance also creates motivation for employees. This is also one of the policies to retain qualified personnel”, said Quan.
It is known that the shares to be sold to VPBank’s employees in this phase are restricted from transferring within three years from the end of the issuance. Shares to be sold to the general director and members of the Supervisory Board are restricted from transferring during their terms, in accordance with the Law on Credit institutions.
At the AGM held in early March, shareholders of Vietnam Technological and Commercial Joint Stock Bank (Techcombank) have approved the ESOP. The issuance source will be from the treasury share fund with about 17 million shares. Employees entitled to buy these shares must have at least one year of work at the bank, and also meet a number of other criteria on performance in the previous year. The purchasing price of this share is 10,000 dong per share.
Vietnam International Commercial Joint Stock Bank (VIB) is also planning to issue ESOP shares. Accordingly, the bank’s Board of directors will submit shareholders the plan to use 1,975,500 treasury shares for the bank’s employees at the bank’s AGM on March 29th. In 2017, the bank’s shareholders committee also approved the plan to distribute bonus shares to employees at 0.4 percent on charter capital, equivalent to nearly 23 billion dong.
Information from Military Commercial Joint Stock Bank (MBBank) showed that in October 2017, the bank issued over 17.12 million shares (1 percent of the current charter capital) under ESOP plan.
Talking to Dau tu Chung khoan newspaper, general director of MBBank Luu Trung Thai said that since the bank’s employees respond positively, the programme was successfully implemented. The bank also prioritised key personnel and managers. It is known that the total ESOP issuance at par price of 10,000 dong per share was over 171.27 billion dong. These shares are also restricted for transferring within two years from the issuance date.
Involving the sharing of benefits to employees, in late 2017, the market was fairly heated when Chair of the Board of directors of Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) Nguyen Duc Huong refused his right to purchase shares. However, Huong said that “I want to cede the right to buy LPB shares to the bank’s employees to increase their connection with the bank, as in the past they were able to buy a very small amount compared to their needs”.
Implementing the plan to raise charter capital to 7.5 trillion dong, LienVietPostBank issued shares to existing shareholders and employees, and issued two trillion dong of one-year convertible bonds.
The key point of the issuance plan this time is to ensure that LienVietPostBank will be the first commercial joint stock bank where each leader and each employee own the bank’s shares.
“This policy aims to promote the responsibility of each member of the system in order to protect LienVietPostBank brand. When all employees are shareholders, developing the bank is also their own responsibility and interest”, said Huong.
