Dividend Payout Ratio Of Banks At Record High Level

Previously, investors always felt unfair when banks consecutively paid no dividends, then this year, some banks have reported the dividend payment at record high level, to nearly 70%.

The highest record now comes from VPBank with share bonus and dividend pay-out ratio at 67%, of which, the dividend payment to shareholders is 30.22%. VPBank also said if the profit plan of more than 10 trillion dong is achieved in 2018, the bonus share and dividend pay-out ratio at this time next year will not be lower than 60%.

VIB has also decided to pay dividend and share bonus to shareholders at 36%, including cash dividend at five percent. In 2017, shareholders of this bank were paid dividends and bonus shares at more than 44%.

Meanwhile, HDBank said as 2017 business results exceeded the plan, this bank decided to make dividend payment to shareholders at 35%, of which 20 percent of the dividends are paid in shares.

For MB, if the dividend pay-out ratio in the previous years was just around 10%, then this year, this bank decides to make dividend payment at 11 percent plus bonus shares at 15%, totalling 25%.

LienVietPostBank also raises the dividend pay-out ratio this year to 15 percent compared to 10 percent last year.

In this year, bank shares are forecasted to continue flourishing with large demand. Therefore, the dividend payment in shares will help shareholders gain larger value than cash. As a result, many shareholders as well as bank share investors want to receive share dividends this year, instead of cash as in some previous years.

Experts say that in 2018, banks continue to expect profits due to positively growing economy, improving credit activities of banks, gradually handled bad debt since the issuance of Resolution No.42/2017/QH14.

These factors positively influence on profits of banks in the following years and will positively affect bank share price in this year.

The recently released survey of Vietnam Report shows that more than 45 percent of respondents who are experts and listed businesses said that shares of finance and banking group will grow and have the best profitability in the stock market in this year.

Commenting on the possibility of bank profit growth in 2018, Johan Nyvene, CEO of Hochiminh Securities Company (HSC) said “Banking is a key sector of the economy. Vietnamese economy still has a lot of potential for development, so opportunities of the banking sector are very large”.

According to BIDV Securities Company (BSC), shares of the banking sector are considered to be positive in 2018 as credit activities are expected to have good growth, bad debt and restructuring of ailing credit organisations are strengthened. Besides, it is expected that the listing of more than nine banks in the near future will bring about attractiveness to shares of this sector.

Also according to this Securities Company, core business results in 2018 are expected to continue growing thanks to economic growth and promotion of non-interest activities, the potential land that many Vietnamese banks have not fully exploited. Credit in 2018 is expected to achieve the growth rate of 17-19 percent as economic growth rate is forecasted to reach 6.6-6.8%, and the loosening of room for using short-term capital for medium and long-term loans from 40 percent to 45 percent in 2018.

 

Category: Finance, Vietnam

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