Vietnam’s largest bank Vietcombank will not lower lending standards in the post-pandemic stage to keep capital healthy in 2020, chair Nghiem Xuan Thanh has said.
The bank will raise the quality of credit to cope with the country’s economic development after the COVID-19 pandemic is over, he said at the bank’s annual shareholder meeting on Friday.
Vietcombank will overhaul business activities to reduce the quantity of lending and increase retail sales, which include service charging and capital investment, the chair said.
The bank will look for new customers, review wholesale credit policy, increase investing in financial bonds and improve its banking investment division, Thanh added.
In 2020, Vietcombank eyes total asset rising 7 per cent year-on-year to VND1.3 quadrillion (US$55.9 billion). Raised capital is projected to gain 8 per cent year-on-year to VND1 quadrillion and outstanding loans are forecast to increase by 10 per cent year-on-year to VND815.5 trillion.
The bad debt ratio is set to be kept below 1.5 per cent in 2020, with the dividend rate 8 per cent for this year and the bonus paid in cash or shares.
Vietcombank did not set a specific earnings target for 2020.
The performance will be decided upon Vietnam’s economic development in the post-virus stage and the earnings plan will have to be pending for the central bank’s approval, chair Thanh said.
At a meeting in mid-April, deputy governor of the State Bank of Vietnam Dao Minh Tu asked all State-controlled banks to cut at least 40 per cent of total profit to help local businesses deal with COVID-19.
Vietcombank recorded little annual change in its six-month profit. The figure in the first half of 2019 was VND11.3 trillion.
In 2020, the bank will raise its charter capital by issuing bonus shares and selling shares in a private deal to raise its capital adequacy ratio (CAR) to the minimum 9.24 per cent under Basel II standard.
Vietcombank will issue dividend shares at an 18 per cent ratio to up charter capital by VND6.67 trillion to VND43.76 trillion in the third or fourth quarter of the year.
In addition, a maximum of 241 million shares or 6.5 per cent of the bank’s capital, will be sold in a private deal to raise some VND2.41 trillion for charter capital.
The bank also plans to hire more than 2,200 new employees in 2020.
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