So far, some banks have announced plans to organise 2018 annual general meeting (AGM). Specifically, LienVietPostBank, MB and VIB will hold the meeting at the end of March; Eximbank, Sacombank will organise the meeting at the end of April.
Apart from hot issues such as personnel, profit, capital increase, listing, etc. the dividend issue, as usual, is still the top concern of shareholders, especially in the context that banks have simultaneously announced trillion dong profits over the last period.
Maritime Bank has not made dividend payment to shareholders for many years now. Though the bank has not publicised plans to organise AGM in 2018, with just 164 billion dong profit in 2017 (nearly achieving the set target), it is likely that this bank will continue making no dividend payment.
Similarly, the situation of receiving no dividend for many years now by shareholders of Eximbank, NCB, SCB, etc. will probably be extended as the restructuring process still has a lot of work to do.
Besides no dividend payment, the payment of dividend in shares instead of cash has also become familiar. The number of banks making dividend payment in cash can be counted on fingers such as VIB, VPBank, Vietcombank, Vietinbank, BIDV, etc.
The reason is most banks in the market are now facing the pressure of increasing equity to meet Basel II standards and the easiest way is to issue bonus shares to increase capital.
The banks’ payment of dividend in shares for many years has caused troubles to shareholders. However, this year, shareholders will probably be happier with the return of King stocks. Moreover, the dividend payment ratio this year is also larger than previous ones.
The reports to be submitted to the 2018 AGM of banks have not been publicised, but many banks plan to make higher dividend payment than last year. The leading banks in terms of dividend payment included VPBank, VIB, HDBank, etc. with the ratio of 25-45 percent.
According to Lawyer-Dr Bui Quang Tin, founding director of BizLight, in 2018, the banking sector’s profit is forecasted to continue increasing sharply thereby, the dividend payment to shareholders and investors will also be higher. “In 2018, profits of banks are forecasted to be good thanks to five factors including credit growth, decreased bad debt, increased revenue from services, cost reduction and capital divestment. Increased profit will lead to improved dividend payment”, said Dr Bui Quang Tin.
Apart from attractive dividend payment ratio, the booming of stock market is facilitating banks to divest and to shift from OTC to official bourse. These factors are attracting investors to continue pouring capital into bank shares. However, experts said bank share prices are at their peak and may adjust in the near future, and investors who buy at this time may not have profits”.
“Bank stocks are too high compared to the profitability and growth. Such indicators as P/E, P/B have already at investment threshold. The market may increase for some more time, but in this period, there will have many Bull traps (price increase). The current market is for experienced surfing investors. Value investors should stand outside for some time, and wait for market adjustment to come back”, said Dr Dinh The Hien, an economic expert.
