In previous years when many banks were unable to pay dividends, many shareholders expressed frustration. This year, the annual shareholders’ meeting season seems more peaceful.
One of the banks paying high dividends for 2018 is Hochiminh City Development Joint Stock Commercial Bank (HDBank). In 2018, HDBank’s after-tax profit reached 3.202 trillion dong, up nearly 64 percent over the previous year. It continues to pay dividends and bonus shares at a high level of 30 percent, a steady level over the past years. In particular, the cash dividend rate is 10 percent and the stock dividend rate is 20 percent.
With nearly 981 million outstanding shares, the total value of HDBank’s dividend payment is 981 billion dong. Retained earnings after dividend payment, 1.605 trillion dong, is added to working capital. To reward shares, HDBank will issue over 196 million shares, worth 1.962 trillion dong, from accumulated capital surplus. Regarding implementation time, HDBank’s Board of directors asked shareholders for approval and authorisation to decide the time in accordance with the provisions of law and the State Bank of Vietnam (SBV).
At Asia Joint Stock Commercial Bank (ACB)’s recent 2019 Annual general Meeting of Shareholders (AGM), its shareholders approved the dividend payment for 2018 and 2019 at the same rate of 30 percent. In 2018, the payment will be made of shares. In 2019, it will be 20 percent of shares and 10 percent in cash.
To pay 30 percent dividend of 2018, ACB expects to issue 374 million shares. Tran Hung Huy, Chair of ACB’s Board of directors, said that, out of 3.741 trillion dong additional chartered capital due to paying share dividends, the bank expects to use 1.706 trillion dong for credit activities, investment in government bonds, ensuring operational safety criteria, and supplementing medium and long-term capital sources. The remaining 1.706 trillion dong will be used for procurement of fixed assets and basic construction.
In addition to dividends, ACB’s Board of directors also plans to sell a maximum of 6.2 million treasury shares out of 41 million treasury shares currently held to make bonus shares to employees. The selling price is expected not to be lower than the average cost of treasury shares of 16,072 dong per share, significantly lower than the current market price of 30,000 dong per share.
At Nam A Joint Stock Commercial Bank (Nam A Bank)’s AGM held at the end of March 2019, a shareholder revealed, 2018 dividend was distributed by shares at 16 percent. This, compared to 5 percent to 7 percent of the previous years, is remarkable effort of the bank’s Board and the Executive Board. However, according to this shareholder, Nam A Bank should soon promote the listing plan to improve liquidity and share price, as both of these indicators in the OTC market are low.
Answering the shareholder’s question, Tran Ngoc Tam, general director of Nam A Bank, said that the listing has been included in the regulation. After being approved by the shareholders, the Board of directors of Nam A Bank will conduct the procedures and documents for listing of shares, thereby improving liquidity as well as share price.
Even at banks that have not paid dividends, shareholders do not have many questions as before.
Responding to shareholders about the time when Saigon Joint Stock Commercial Bank (SCB) stops setting up risk provisions and pays dividends, Vo Tan Hoang Van, SCB’s general director, said that the bank is in the process of restructuring under the policy of the SBV. Therefore, it has to focus all resources on handling bad debts. In the short term, shareholders will be disadvantaged, but this will be beneficial for shareholders later.
‘Currently, SCB’s retained earnings are about 670 billion dong and when approved by the SBV, this source will be distributed to shareholders. Along with a large reserve of over 8.2 trillion dong, this will be a great value for future shareholders,’ Van said.
