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Banking & Finance

SBV reaps dividends of $270mn from three banks

Released at: 14:50, 04/05/2017

SBV reaps dividends of $270mn from three banks

Photo: sbv.gov.vn

BIDV, Vietcombank, and VietinBank to forward 2016 dividend payments to central bank.

by Van Hai

The State Bank of Vietnam (SBV) has received significant dividend payments for 2016 from BIDV, Vietcombank, and VietinBank, totaling VND6.17 trillion ($271.375 million).

The SBV is the dominant shareholder in the three banks and also Agribank, and as such is responsible for their operations. With solid credit growth last year, the three banks provided large dividends to the State coffers.

Vietcombank recorded profit growth of 25 per cent and VietinBank 17 per cent. BIDV’s profit, meanwhile, fell more than 2.5 per cent. Agribank is yet to release its financial statement for 2016.

The three banks held their annual general meetings at the end of April, where dividend plans were approved. Under the direction of the Ministry of Finance, the three banks will pay a cash dividend of 7 or 8 per cent.

With a shareholding of 95.28 per cent in BIDV, the bank provided the SBV with the highest dividend, of VND2.28 trillion ($100.228 million), despite its dividend being 7 per cent and it recording falling profits last year.

Vietcombank followed, with a dividend of 8 per cent totaling VND2.219 trillion ($97.596 million). VietinBank’s dividend rate was 7 per cent, with the SBV to receive some VND1.680 trillion ($73.889 million).

The VND6.179 trillion ($271.764 million) the SBV will receive is down by VND324 billion (14.249 million), or 5 per cent, compared to the dividend payment for 2015.

BIDV’s falling profits is the main reason for the decline, and its dividend also fell from 8.5 per cent to 7 per cent. Its merger with the Mekong Delta Housing Development Bank (MHB) and its ongoing restructuring greatly affected its performance last year.

The State is planning to divest from businesses and credit institutions. It is expected to cut its stake in BIDV from 95.28 per cent to 65 per cent and to equitize and reduce its ownership in Agribank by 65 per cent during 2016-2020. These banks are free to seek and select strategic partners, especially foreign partners.

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