Asia Commercial Joint Stock Bank (ACB) plans to pay a 30 per cent share dividend for 2020 to prepare for life after the COVID-19 pandemic.
Every shareholder will receive three new shares for every 10 shares they hold, meaning ACB will have to issue nearly 499 million new shares.
The bank currently lists more than 1.66 billion shares on the Hanoi Stock Exchange (HNX) with code ACB.
ACB shares gained 2.1 per cent to trade at VND23,800 (US$1.03) apiece on Tuesday.
The issuance is expected to happen in September. The previous dividend plan was 20 per cent in shares and 10 per cent in cash.
As the pandemic is nowhere near containment, the share issuance plan will help ACB increase capital for lending, government bond purchasing and investing in strategic targets for 2019-24.
ACB also hopes to move its shares from the HNX to the Ho Chi Minh Stock Exchange (HoSE) in November or December this year.
If approved, ACB shares may be added to the large-cap tracker VN30-Index and other special trackers like VNDiamond, VNFIN Select and VNFIN Lead.
The switch will improve the status of ACB shares to investors, raising the bank’s valuation, CEO Do Minh Toan said at the bank’s annual shareholder meeting on Tuesday.
Half-way completion
CEO Toan said ACB in the first five months earned a total of VND3.5 trillion in pre-tax profit, equal to 45.8 per cent of the full-year target.
The bank might fulfil half of its profit target in June, he said.
The bank had suffered a loss in service fees while total lending grew by only 4 per cent in the five months, Toan said.
The decline of service fees was covered by the growth of bancassurance and card issuance, he added.
Lending income had declined by 30 percentage points year-on-year and credit growth was slow because ACB had activated a risk-sharing mechanism with customers to maintain its market share, he said.
Total lending is estimated at VND15 trillion and loan repayments depend on the recovery of the economy, according to the CEO.
ACB in 2020 targets to raise total assets, customer savings and credit by 11.75-12 per cent year-on-year. The bad-debt ratio is expected at a maximum 2 per cent and pre-tax profit is projected at nearly VND7.64 trillion.
The bank also plans to sell bonds on the international market and offload its ownership in the member firm ACB Securities Co (ACBS).
ACB in 2019 posted a 16 per cent annual increase in total assets, reaching VND384 trillion at end of the year.
Customer savings rose 14 per cent on-year to VND308 trillion in 2019 and outstanding loans were worth VND269 trillion, up 17 per cent year-on-year.
Pre-tax profit gained 18 per cent year-on-year to VND7.5 trillion last year.
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