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Banking & Finance

Vietcombank’s charter capital to stand at $1.74 billion

Released at: 16:12, 30/04/2017

Vietcombank’s charter capital to stand at $1.74 billion

VCB 2017 annual meeting (Photo VCB)

The bank records Q1 pre-tax profits of nearly $116.5 million.

by Uy Vu

At their annual meeting on April 28, Vietcombank (VCB) shareholders approved the bank’s plan to issue an additional 359.8 million shares, equivalent to 10 per cent of its capital, to expand its charter capital to almost VND39.6 trillion ($1.74 billion).

According to the plan, the shares will be sold either to the public or offered to no more than 10 investors (including existing shareholders) in a private placement in late 2017 or next year.

Vietcombank plans to use about VND3 trillion ($131.9 million)  of the proceeds from the issuance to expand lending and other business activities, as well as fund possible mergers and acquisitions (M&As).

Vietcombank chairman Nghiem Xuan Thanh stated that M&As would be a long-term strategy and should ensure that  the bank expands its network and accesses new markets.

Vietcombank has two major stakeholders, with the State Bank of Vietnam owning 77.11 per  cent and Mizuho Bank from Japan 15 per cent. Mizuho is Vietcombank’s only foreign strategic investor.

Vietcombank is the most expensive bank on the stock exchange with a share price ranging around VND35,000 ($1.54) a share. It is also the biggest listed lender with market capitalisation at VND126.3 trillion ($5.6 billion) on April 28.

At the meeting, Vietcombank’s shareholders also approved the 2017 business targets, including increasing pre-tax profit by 8 per cent year-on-year to VND9.2 trillion ($404.6 million) and increasing total assets 11 per cent to VND874.6 trillion ($38.5 billion). The dividend rate will remain at 8 per cent this year.

The bank aims to expand its credit outstanding by 15 per cent to VND547.1 trillion ($24 billion), total capitalisation up 14 per cent to VND684.8 trillion ($30.1 billion) and keep the bad debt ratio below 2 per cent.

In the first quarter of this year, the bank reported pre-tax profits of nearly VND2.65 trillion ($116.5 million), up 15 per cent year-on-year. Last year, its pre-tax profits stood at VND8.5 trillion ($373.8 million), up 25 per cent year-on-year. 

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