VPBank Chairman announces good news to shareholders, 'debt' answers name of merged bank

On April 18 in Hanoi, Vietnam Prosperity Joint Stock Commercial Bank ( VPBank ) held its 2023 Annual General Meeting of Shareholders.

Will increase cash dividends

At the meeting, Mr. Ngo Chi Dung - Chairman of VPBank's Board of Directors, announced good news to shareholders when he informed: On April 18, partner SMBC transferred 10% of the value of the purchased shares, equivalent to VND 3,590 billion. VPBank will receive the remaining amount after completing procedures according to legal regulations. It is expected that by the end of July or early August, the procedures will be completed for the partner to transfer the money.

Responding to a shareholder’s question about VPBank taking over a weak bank, Mr. Dung said: “At this point in time, I can only say that VPBank is one of four banks participating in restructuring a weak bank. Beyond that, I cannot say anything more.”

The congress approved the business targets for 2023. Total assets reached VND 877,460 billion (up 39% compared to 2022). Customer deposits and valuable papers reached VND 518,192 billion (up 41%). Outstanding credit balance reached VND 635,972 billion (up 33%). Parent bank's bad debt ratio was below 3%. Pre-tax profit reached VND 24,003 billion (up 13%).

In 2022, VPBank achieved consolidated after-tax profit of VND 16,908 billion. After setting aside mandatory reserves, the General Meeting approved the plan to allocate VND 7,933 billion in cash to pay dividends in 2022 at a rate of 10%. This is the first time in more than 10 years that VPBank has paid dividends in cash. The portion of retained earnings for business operations is VND 7,354 billion.

Sharing at the Congress, Mr. Bui Hai Quan, Vice Chairman of VPBank's Board of Directors said: "I don't remember the last year I received cash dividends. But I hope that from now on, every year we will be able to submit to the General Meeting of Shareholders for approval to pay cash dividends."

VPBank Chairman Ngo Chi Dung at the General Meeting of Shareholders. (Photo: Ngoc Tuan)

At the end of 2022, VPBank had a charter capital of up to VND 67,434 billion. The bank's capitalization value reached VND 120,000 billion, maintaining its position as the private bank with the largest capitalization in Vietnam.

After successfully selling 15% of shares to strategic partner SMBC, the bank's new charter capital will reach VND79,339 billion. VPBank's equity after selling capital to SMBC will increase to nearly VND140,000 billion, ranking second in the entire system.

Increase investment in stocks and insurance

Mr. Nguyen Duc Vinh, General Director of VPBank, said that 2023 will be the year the bank continues to expand its operations based on capital resources and human resources. In particular, it will expand customer segments, increase investment in the fields of securities, fund management, insurance, and develop digital ecosystems, etc.

“VPBank is currently one of the three largest retail lending banks in the market, and one of the three strongest banks in lending to the high-end customer segment. This shows that the bank has a diverse customer segment. In the future, the bank will continue to expand into the FDI customer segment and has also established an FDI Customer Center,” said Mr. Nguyen Duc Vinh.

However, Mr. Vinh assessed that the economic slowdown in the first quarter, and possibly even in the second quarter, would be a real challenge. However, the Executive Board has not changed its ambition for 2023 and believes in the economic recovery in the last 6 months of the year.

“If we do not achieve the target in the first 6 months of the year, the Board of Directors will have to find every way to make up for it in the last 6 months of the year. If there are any difficulties or problems, the Board of Directors will submit them to the Board of Directors for adjustment. However, at this time, I affirm that the Board of Directors will not change the target for 2023,” said Mr. Vinh.

According to Mr. Vinh, the bank's Board of Directors has approved the restructuring plan of FE Credit Finance Company for long-term development of this consumer finance company. VPBank's CEO expressed his belief that consumer finance will continue to be a strong market in the next 5-10 years, but affirmed that the company will be restructured cautiously.

By "closing the deal" with strategic partner SMBC, the General Meeting of Shareholders agreed to change the bank's maximum foreign ownership ratio from 17.642% to 30% to carry out the offering of shares to foreign strategic investors.

After officially owning 15% of VPBank's new charter capital, partner SMBC will send a representative to the bank's Board of Directors, and the Board of Supervisors (BOS) will also elect an additional member.

Accordingly, the bank's Board of Directors has 6 members and the Supervisory Board has 4 members. The election of additional members of the Board of Directors and Supervisory Board will be carried out at the nearest General Meeting of Shareholders after SMBC becomes an official shareholder of VPBank, and also depends on the approval from the State Bank.

This congress also agreed to officially dismiss Ms. Nguyen Thi Mai Trinh from the position of member of the Supervisory Board according to her resignation letter sent to the Board of Directors from December 2022.

VPBank's General Meeting of Shareholders also approved the remuneration and operating budget of the Board of Directors and the Supervisory Board in 2023, equivalent to 0.5% of the bank's consolidated pre-tax profit. This rate has remained unchanged since 2019.

Thus, in case the bank achieves the pre-tax profit target of VND 24,003 billion, the remuneration and operating budget of the Board of Directors and the Board of Supervisors will be VND 120 billion.

VPBank sells 15% of capital to foreign partner, earning 1.5 billion USD. Japanese financial group Sumitomo Mitsui Banking Corporation (SMBC) bought 15% of VPBank shares after divesting from Eximbank after 10 years of unsuccessful cooperation.

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