As Tet approaches, bank shareholders are receiving good news as they are about to receive cash dividends.

Many banks have made plans to pay cash dividends.

Right in the first month of 2024, many banks began announcing their dividend distribution plans for shareholders. Among these, cash dividends attracted particular attention from investors because they would receive "real money."

The bank's health is solid.

Vietnam International Commercial Joint Stock Bank (VIB ) is the first bank to announce a cash dividend payment this year. VIB has decided to disburse over VND 1,500 billion as an interim cash dividend for 2023 to existing shareholders at a rate of 6%. Accordingly, shareholders owning one share will receive VND 600. The dividend payment is expected to be made on February 21, 2024.

At the 2023 Annual General Meeting of Shareholders, VIB's leadership shared that, if there were no restrictions from competent authorities, VIB expected to be able to distribute dividends exceeding 30% of its after-tax profits achieved in 2023.

In 2023, VIB distributed dividends twice, in March and May, at rates of 10% and 5% respectively. Additionally, VIB also paid dividends in shares to increase its charter capital at a rate of 20%. The bank also issued an additional 7.6 million shares to employees under the ESOP program in June 2023. Consequently, VIB's charter capital increased to VND 25,368 billion.

In addition to maintaining stable business growth, and aiming to improve asset quality and create a solid reserve buffer, the bank proactively set aside provisions of over VND 4,800 billion, 3.8 times higher than in 2022. At the end of 2023, VIB recorded pre-tax profit of over VND 10,700 billion.

At the end of 2023, Vietnam Technological and Commercial Bank ( Techcombank ) achieved a pre-tax profit of VND 22,900 billion. Therefore, at a recent meeting with investors and analysts, the bank revealed that it will present to its 2024 shareholders' meeting a proposal to pay a cash dividend of at least 20% of total annual after-tax profit or 4%-5% of the bank's equity at the beginning of the year.

If the plan is approved, Techcombank shareholders will receive their first cash dividend in 10 years.

Mr. Jens Lottner, CEO of Techcombank, stated: "For the past 10 years, we have consistently adhered to a policy of retaining all profits for reinvestment and business expansion. However, we are now reconsidering this."

Explaining the change in dividend payment policy, Mr. Jens Lottner said that based on an assessment of profit potential, capital situation, and forecasts of policy changes, the management believes that the bank can pay cash dividends while maintaining a 20% annual growth rate in revenue and profit, as well as the safety ratios as outlined in the strategy.

Mr. Jens Lottner also affirmed that Techcombank's leadership is developing a policy to distribute cash dividends sustainably and over the long term, not just for a few years. However, he noted that the final decision will rest with the Board of Directors and the General Meeting of Shareholders.

After years of focusing resources on strengthening financial health and supporting customers as directed by the State Bank of Vietnam, since 2023, some banks have resumed paying dividends in cash.

After 10 years, Techcombank shareholders may receive cash dividends. (Photo: PV/Vietnam+)

For shareholders, paying cash dividends reflects the bank's "health" with a solid capital base, meaning their long-term investment has yielded a return.

In 2023, six banks distributed a portion of their dividends in cash: VPBank, HDBank, VIB, TPBank,ACB , and MB. It is estimated that the total amount these banks spent on dividends for shareholders was over 23,000 billion VND.

The buffer still needs further reinforcement.

In addition, many banks still encourage dividend distribution in the form of shares to increase capital, helping to thicken the bank's capital buffer, increase lending capacity, and enhance financial resilience against future risks.

Over the past year, more than 20 commercial banks have received approval from the State Bank of Vietnam to increase their charter capital. It is expected that at the 2024 annual general meetings, many banks will announce plans to distribute stock dividends to increase capital.

Mr. Tran Minh Binh, Chairman of the Board of Directors of VietinBank, said that the bank has received approval from the State Bank of Vietnam and the Ministry of Finance to retain all profits from 2022 to increase capital through the distribution of stock dividends.

"VietinBank proposes that the competent authorities allow it to retain all profits from 2023 to increase capital and approve the policy allowing VietinBank to retain all annual profits for the period 2024-2028 to increase capital, enhance financial capacity, and expand credit growth potential," Mr. Tran Minh Binh suggested.

In the context of rising bad debts and significant pressure to supply capital to the economy, strengthening the capital base of the banking system is particularly important. This is also the policy of the State Bank of Vietnam.

Following the issuance of over 62.5 million shares, BacABank's charter capital is expected to increase from nearly VND 8,334 billion to over VND 8,959 billion.

BacABank has announced a resolution regarding the record date for dividend payment in shares. Accordingly, the bank plans to issue over 62.5 million shares to pay dividends, equivalent to a 7.5% dividend rate. The total value of the issuance at par value is over VND 625 billion. The funds for this issuance will come from accumulated undistributed profits in 2023, after provisions for various reserves. Following the issuance, BacABank's charter capital is expected to increase from nearly VND 8,334 billion to over VND 8,959 billion.

Dr. Can Van Luc and a team of experts from the BIDV Training and Research Institute believe that the slow improvement and low level of capital adequacy ratio (CAR) of banks compared to the region is one of the challenges in the coming years. While countries in the region have implemented Basel III or parts of Basel III, Vietnamese commercial banks are only in the process of implementing Basel II.

Therefore, according to Mr. Luc, charter capital is a key component in calculating the CAR ratio and ranking banks. Increasing the charter capital of banks in the coming period is absolutely necessary, helping banks develop healthily, expand business operations, and increase their resilience in a volatile economy.

HA (according to Vietnam+)

Source: https://baohaiduong.vn/tet-den-co-dong-ngan-hang-don-tin-vui-khi-sap-nhan-co-tuc-bang-tien-mat-372015.html