Banks’ Annual general Meeting (AGM) season has started. In addition to the hot issues of business orientation, capital increase, and listing on the stock exchange, etc., many banks unexpectedly make changes in senior management.
The AGM season of banks in 2018 opened with the meeting of Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and immediately warmed up with information about the bank’s impressive profit after eight years of no dividend payment. The gross profit of over nine trillion dong of Techcombank has stunned other banks. Moreover, the bank did not hide the aim to continue the first position in the group of joint stock banks with gross profit of up to 10 trillion dong and an impressive capital raising roadmap.
Meanwhile, after six years, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) this year has posted profits of even trillion dong.
Despite attaining huge profit of over 5.3 trillion dong, which is 40 percent higher than the profit plan and the highest in the bank’s history, Military Commercial Joint Stock Bank (MB) still lost the top position. Talking to Tien Phong newspaper, vice Chair of MB’s Board of directors (BOD) Luu Trung Thai shared that he personally is happy for the “neighbours” but deep analysis shows that it is the gross profit of a long term accumulation, not only the dividends for shareholders of Techcombank and VPBank. He affirmed that “MB thought about shareholders rights and divided equally. If MB did not pay dividends in those years, its profit would have been doubled”.
At the AGM held recently, MB’s vice Chair said that in 2018, MB set challenging business targets with total assets growth of 11%, charter capital increase of 19%, pre-tax profit reaching 6.8 trillion dong (in which profit of the bank alone is 6.5 trillion dong), and bad debt ratio controlled at below 1.5%. “With solid foundation, experience and strengthening and improving management capacity at the parent bank as well as other member companies, the strong development and growth potential of member companies will be the key factors for MB to achieve its targets”, Thai emphasized.
Nguyen Dinh Thang, Chair of Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) said that setting high profit and dividend plan is a pressure for the bank’s member of BOD but for the benefits of shareholders, LienVietPostBank always tries to complete the goals. In 2018, the bank aims to attain 1.8 trillion dong profit, higher than 2017. According to Thang, balancing the objectives and pursuing long-term benefits for shareholders are what the bank’s BOD is doing. In the past five years alone, the dividends paid to shareholders of LienVietPostBank was around 46-47%.
At present, numerous banks in the south such as Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Export Import Commercial Joint Stock Bank (Eximbank) are urgently preparing for this year’s AGFor Eximbank, the story can focus on risk management and personnel changes in the BOD; while for Sacombank, a lot of positive information will be submitted under the leadership of Duong Cong Minh.
In early March 2018, Nam A Commercial Joint Stock Bank (NamABank) decided to replace its senior personnel. After Luong Thi Cam Tu, general director of NamABank resigned to move to another job, the bank’s BOD decided to appoint Tran Ngoc Tam as Acting general director since March 5th. Although the bank has not release the reason for the replacement, information of Tien Phong showed that Cam Tu may have taken a new assignment from the bank’s BOD and been nominated to another important position at a bank in which NamABank is a shareholder. This bank is about to hold its AGM.
Meanwhile, at the AGM held on March 28th, Nguyen Duc Huong, a fairly well-known name in banking and finance industry officially said farewell and handed over the chairmanship of LienVietPostBank’s BOD to Nguyen Dinh Thang who is former vice Chair (Thang won the election with high votes at the AGM). Huong will continue to work with the bank as a senior advisor. With 10 years devoting to build a strong brand name for LienVietPostBank, financial experts and the bank’s employees all appreciate Huong’s efforts and marked contribution. This farewell, according to Huong, is unwillingly due to health reason.
Regarding the replacement of general director position of some banks in the recent time such as An Binh Commercial Joint Stock Bank (ABBank) and Southeast Asia Commercial Joint Stock Bank (SeaBank), general director of a large joint stock bank (with long time being in CEO position) talked to Tien Phong newspaper that this is not very surprising because the selection of CEO always depends on the strategy of each bank. He also added that in the next few years, the pressure form the market and business environment on CEO is very large. “The pressure of profits, dividends and building orientation and strategy for the bank are unavoidable and if the CEO is unable to meet these requirements, the BOD or the bank owners will choose other people instead” he asserted.
According to banking expert Nguyen Tri Hieu, changing CEOs at banks is an indispensable trend. Hieu said that the change of CEOs in this period is a good thing because the banking sector is in the second phase of the restructuring process. The trends such as integration and development of digital technology require young leaders to be enthusiastic, knowledgeable and experienced.
In this year’s AGM season, banks also announce numerous other targets. For example, Techcombank is considering listing on the stock exchange in 2018 with the current price on the Over the Counter currently reaching 9xx, etc.; while Tien Phong Commercial Joint Stock Bank (TPBank) is preparing to list on the Hochiminh city Stock Exchange at starting price possibly reaching over 3xx.
As per Ho Hung Anh, Techcombank’s Chair of BOD, in 2017 the bank fully provisioned for the debts sold to VAMC and it will no longer have to settle those debts and will return to normal operation in 2018. The bank will even record the reversal of risk provisioning in its profit in 2018 and the following years. “The appointment of general director depends on each bank’s BOD, and the State Bank only controls in terms of conditions and standards and is responsible for supervising the term of appointment to not exceed five years.
