On the morning of April 26, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) held the Annual general Meeting of Shareholders in 2019.
Opening the meeting, Nghiem Xuan Thanh, Chair of Vietcombank, said that in 2018, the bank continued to recognise outstanding growth and achieved impressive results on almost all areas of operation.
Specifically, its total assets at December 31, 2018 reached 1.074 quadrillion dong, up 3.7 percent; Its total capital mobilisation reached 823.390 trillion dong, up 13.3 percent; Its credit outstanding reached 639.370 trillion dong, up 14.6 percent, within the ceiling of the State Bank of Vietnam (SBV). Its profit before tax reached 18.269 trillion dong, increasing by 61.1 percent over the previous year.
In addition, thanks to the strict control of credit quality and the promotion of bad debt handling, in 2018, Vietcombank has reduced the nonperforming loan (NPL) ratio to 0.97 percent for the first time.
Moving on to the 2019 plan, according to Thanh, the government and the SBV are aiming to strengthen solutions to support businesses and boost the economy, so Vietcombank will continue to reduce lending interest rates to businesses in many areas besides five priority areas that it has applied previously.
‘Vietcombank belongs to a group of banks that have bought all bad debts at VAMC. Currently, the bank’s risk provisions have reached over 170 percent, which means the reserve is 170 dong for 100 dong of bad debt. The capital adequency ratio (CAR) according to Basel II standards is up to more than nine percent, while the requirement is eight percent. At the same time, it has a good profit, so it reduces interest rates to share difficulties with businesses,’ said Thanh.
Therefore, instead of the planned pre-tax consolidated profit in the meeting document of 20.5 trillion dong, corresponding to an increase of 12 percent, Vietcombank decided this target in 2019 to increase by only 9.5 percent, equivalent to 20 trillion dong. Its total assets accordingly are expected to increase to 1.2 quadrillion, up 12 percent.
However, this year, Vietcombank is one of the commercial banks that are allocated higher credit target than the industry average, at 15 percent. Along with the results achieved in the first quarter of 2019, it is likely that this bank will continue to exceed the assigned target.
In addition to adjusting the business plan, Vietcombank also proposed two plans to raise capital to bring charter capital from over 37.089 trillion dong to nearly 55.3 trillion dong.
Specifically, Vietcombank proposed to allocate bonus share of 40 percent from equity, equity surplus, and retained earnings. Next, the bank planned to carry out a plan to offer shares to existing shareholders or a private placement at 6.5 percent.
At the end of the meeting, Vietcombank’s shareholders approved all proposals with high agreement, including the additional election of members of the Board of directors, the plan of profit distribution in 2018, plans to increase capital, and business objectives.
