Recently, Vietnam Joint Stock Commercial Bank for Industry and Trade ( VietinBank - HoSE: CTG) has agreed on a plan to increase charter capital through issuing shares to pay dividends and cash dividends in 2020.
Accordingly, VietinBank plans to issue nearly 564.3 million shares to pay dividends at a rate of 11.7415%, meaning that shareholders owning 1,000 shares on the record date will receive 117 new shares. The capital source will come from all after-tax profits, fund allocations and cash dividends in 2020.
After completing the issuance, VietinBank's charter capital will increase by nearly VND5,643 billion, from VND48,057 billion to more than VND53,700 billion. The expected issuance time is in the third and fourth quarters of 2023.
The bank also said that the additional capital is expected to be used entirely for business purposes, allocated to VietinBank's areas of operation such as investment in facilities, technology infrastructure, upgrading technical facilities, etc., and expanding the bank's credit and investment activities.
According to VietinBank, increasing charter capital will create conditions for the bank to improve its financial capacity, expand its business operations, increase its ability to supply capital to the economy and invest in transformation projects to improve the bank's management and operational capacity.
Information on capital sources for charter capital increase (Source: Vietinbank).
Previously, at the 2022 Annual General Meeting of Shareholders, VietinBank's Board of Directors also approved the plan to increase charter capital from VND 48,057 billion to VND 53,700 billion but it has not been completed. The source of implementation is from the remaining profit in 2020.
VietinBank's expected financial targets for 2023: Total assets grow from 5% - 10%; Outstanding credit growth according to the limit approved by the State Bank and the State Bank's management orientation in each period; Operational safety ratios comply with the State Bank's regulations...
In addition, VietinBank also has a plan in 2023 to increase charter capital through issuing shares to pay dividends from the remaining profits in 2021 and the remaining profits accumulated up to the end of 2016. Specifically, the bank will use 12,330 billion VND of retained profits to pay dividends in shares, with an issuance volume of more than 1.2 billion units.
Therefore, in 2023, if at the time of issuance, VietinBank's charter capital is still at VND 48,058 billion, the dividend rate is equivalent to 25.66%. Charter capital is expected to increase to VND 60,387 billion.
In case at the time of issuance, the bank has completed the capital increase to VND53,700 billion, the dividend rate is 22.96%. The charter capital after successful issuance is expected to be VND66,030 billion.
Regarding the 2022 profit distribution, with the individual profit after tax of VND 16,379 billion, the bank will allocate 5% for the charter capital supplement fund, 10% for the financial reserve fund and more than VND 2,300 billion for the bonus and welfare fund. After allocating the required funds, the remaining profit of VND 11,521 billion will be used to pay stock dividends as approved by the competent State agency .
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