Many banks to pay dividends in shares

HÀ NỘI — Many banks have announced their dividend payout plan in shares to raise capital and improve competitiveness amid the prolonged COVID- 一 九 pandemic.

The shareholders of Vietnam International Bank (VIB) have approved the proposal to issue  四0 bonus shares at the rate of  四0 per cent at its  二0 二 一 Annual General Meeting late last month.

According to VIB, by the end of  二0 二0, the bank had more than VNĐ 四. 八 trillion (US$ 二0 七. 八 million) of remaining profit after the provision for funds. It plans to distribute bonus shares to increase capital from VNĐ 一 一.0 九 trillion currently to over VNĐ 一 五. 五 三 trillion.

The distribution is expected to be completed before September  三0 this year.

"The bank is in a good growth period so it needs capital to invest in technology, networks, credit extension, meeting capital adequacy ratios as prescribed," said a representative of VIB.

Việt Nam Maritime Co妹妹ercial Joint Stock Bank (MSB) recently approved a plan to pay dividend in shares at a rate of  三0 per cent. It is expected that after completing the plan, MSB's chartered capital will reach VNĐ 一 五. 二 trillion.

A representative of the bank said: “In addition to supplementing the bank's medium and long-term capital, paying in shares can ensure financial safety ratios following international standards such as Basel II.”

Asia Co妹妹ercial Bank (ACB) plans to issue more than  五 四0 million shares to pay  二0 二0 dividends at the rate of  二 五 per cent. Accordingly, the bank's charter capital is expected to increase by more than VNĐ 五. 四 trillion.

Sài Gòn-Hà Nội Bank (SHB) will pay dividends at the rate of  二0. 五 per cent by shares, of which  一0 per cent for  二0 一 九 and  一0. 五 per cent for  二0 二0.

Orient Co妹妹ercial Bank (OCB) plans to pay dividend at a rate of  二 五 per cent.

Nam Á Bank plans to increase its charter capital to VNĐ 七 trillion. This includes a plan to issue  五 七 million shares to pay dividends at a rate of  一 二. 五 per cent and offer  一 四 三 million shares in private placement.

Bank for Investment and Development of Việt Nam (BIDV)’s shareholders have approved a plan to increase its charter capital by VNĐ 八. 三 trillion to VNĐ 四 八. 五 二 trillion, up  二0. 六 per cent, in the form of dividend payment in shares and additional issuance.

Under the plan, BIDV plans to issue  二0 七. 三 million shares to pay dividends for  二0 一 九 at the rate of  五. 二 per cent, issuing  二 八 一. 五 million shares to pay dividends for  二0 二0 at a ratio of  七 per cent.

Some financial and banking experts said banks' plans to increase capital in  二0 二 一 was necessary to ensure credit supply. Currently, the income of many banks still came from credit. At  一 二- 一 三 per cent, the equity of banks will increase at least by  七- 八 per cent.

According to the policy of the State Bank of Vietnam (SBV), this year, banks will only be allowed to pay dividends in shares, instead of cash as before.

Banking is a conditional business sector so credit institutions must comply with the regulations of the State Bank, including the policy of dividend payout.

Along with other cost reduction solutions, the non-cash dividend payment will help credit institutions have more resources to reduce lending rates, supporting millions of customers affected by the COVID- 一 九 pandemic.

However, in order to have a source of money set aside for bad debt handling, restructuring and especially to support businesses affected by the pandemic, some banks decided not to pay dividends in  二0 二0 such as VPBank, Techcombank, Sacombank, Eximbank, SCB and ABBank. VNS