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"Ambition" to double charter capital

On the morning of April 20th, the 2024 Annual General Meeting of Shareholders of Vietnam Technological and Commercial Bank ( Techcombank – HoSE: TCB) was successfully held, approving several important items such as dividend distribution and increase in charter capital.

At the General Meeting, sharing the business plan for 2024, Techcombank CEO Jens Lottner stated that, building on the foundation of 2023 and projections for 2024, the Techcombank Executive Board proposes a profit target of VND 27,100 billion for 2024. The non-performing loan ratio will be kept below 1.5%.

Mr. Ho Hung Anh, Chairman of the Board of Directors of Techcombank, stated that 2022 and 2023 were two difficult years for the world in general and Vietnam in particular. Techcombank also faced many challenges, especially in areas where the bank is very strong, such as real estate and financial investment.

Ho Hung Anh, Chairman of the Board of Directors of Techcombank.

Nevertheless, the bank has also demonstrated its risk management capabilities. For example, in the bond market, Techcombank has ensured that no bonds have become overdue in terms of interest or principal, guaranteeing safety for its customers.

Furthermore, investing in technology and data has helped Techcombank reduce operating costs, enabling the bank to gradually develop strong segments that were previously not its strengths, such as SMEs, unsecured loans, and consumer loans. Technological support allows Techcombank to grow rapidly while simultaneously managing risks and costs.

“In 2023, Techcombank achieved its set targets. In 2024, recognizing the many challenges in the market, Techcombank is cautiously formulating its plan. I believe that by consolidating and leveraging its strengths, utilizing its technology and data platforms, it will be able to enter other economic sectors and segments while tightly controlling risks,” Mr. Ho Hung Anh shared.

Techcombank's General Meeting of Shareholders also approved the dividend payment plan and the increase in charter capital. Accordingly, with the retained earnings of 2023, after deducting funds, Techcombank plans to distribute cash dividends at a rate of 15% (1,500 VND per share), calculated on the total number of outstanding shares at the time of the record date for receiving cash dividends.

According to Mr. Ho Hung Anh, the bank has not paid cash dividends for the past 10 years. The most recent dividend distribution in the form of shares was in 2019.

After 10 years of consolidating the bank, the last three years recorded average profits of $1 billion. Under these conditions, the bank is fully capable of paying dividends while still ensuring safety indicators. At the same time, Mr. Hung Anh expressed hope that in the coming years, the bank can continue to pay dividends while simultaneously ensuring growth targets and protecting shareholder interests.

Regarding the plan to increase charter capital, Techcombank's Board of Directors plans to increase charter capital from over VND 35,225 billion to over VND 70,450 billion through the issuance of shares from equity capital.

Accordingly, the bank plans to issue an additional 3.5 billion shares with a total value of VND 35,335 billion, each share having a par value of VND 10,000. The exercise ratio is 100%, meaning that shareholders owning 100 entitled shares will receive an additional 100 new shares.

Techcombank CEO Jens Lottner speaks at the General Meeting.

When questioned by shareholders about whether a one-time dividend payout at a very high rate of 100% would affect the share price, Jens Lottner stated that awarding shares to shareholders does not affect equity but merely shifts it from one part to another.

The dilution of shares may cause a slight decrease in price, but this also presents an opportunity for other investors to buy TCB shares at a suitable price. If the institution is deemed to be sound, the share price will likely rebound.

Customer quality is important.

During the general meeting, shareholders also raised many questions regarding Techcombank's business plan and operations for the future.

Some shareholders argue that while other banks are growing their customer base by 6-7 million people a year, Techcombank is growing by only 2.6 million. Will this affect the bank's competitive advantage?

According to Jens Lottner, what Techcombank cares about is the percentage of customers using its products and services, not the number of customers.

“Techcombank always ensures that its customer service system is as profitable as possible. Currently, Techcombank's profits come from a small number of customers. Although the number of customers is small, they are very valuable. The quality of customers is what matters, not the quantity,” Mr. Jens Lottner emphasized.

Regarding plans to increase foreign ownership limits or seek foreign strategic shareholders in the near future, Mr. Ho Hung Anh stated that Techcombank's current foreign ownership limit is 22%, allowing TCB to issue 10% to strategic shareholders.

Techcombank is also considering issuing shares to strategic shareholders. Typically, issuing shares to strategic shareholders results in a higher share price, which benefits all shareholders. Last year, VPBank successfully did this with SMBC, and Techcombank is also exploring similar opportunities. Accordingly, Techcombank is seeking opportunities and expects to find them when the market improves.

Explaining why Techcombank did not participate in acquiring weak banks to secure higher credit growth limits, Jens Lottner stated that this is a question each bank must decide for itself.

When deciding to undertake a mandatory transfer, significant costs must also be incurred to support those struggling banks. Therefore, the bank's leadership must consider this matter very carefully.

I don't think Techcombank is lagging behind other banks in the industry because, when comparing financial indicators, Techcombank still maintains a similar level to the overall industry average .

Source: https://www.nguoiduatin.vn/chu-tich-techcombank-chung-toi-dang-tim-co-dong-chien-luoc-nuoc-ngoai-a659938.html