Plans to increase capital and to deal with the 68-floor VietinBank Tower project in Ciputra urban area were two key issues particularly interested by shareholders at the general Meeting of Shareholders 2019 of Vietnam Joint Stock Commercial Bank of Industry and Trade (Vietinbank
Stock code: CTG) held on April 23.
At the Meeting, shareholders raised questions regarding capital increase. Responding to shareholders, Le Duc Tho, Chair of VietinBank, said that by the end of 2018, the bank’s capital adequacy ratio (CAR) was 9.6 percent and consolidated at 10 percent while regulation was nine percent and banks are still ensuring. Le Duc Tho said that since 2013, VietinBank had not increased its capital.
Resources from equitisation and distribution to strategic partners have helped the bank develop in the past. At one point, the bank grew very fast, 17-20 percent per year and the size of the bank doubled.
According to Tho, over the past time, VietinBank has implemented many alternative solutions to improve risky assets in accordance with state regulations and market conditions.
Specifically, the bank restructured its own capital, issued secondary bonds to supplement Tier 2 capital. “However, this segment has also been exploited to the limit as prescribed. Currently, the bank’s capital needs are very large and need to increase to serve business operations “, said VietinBank Chair.
If it is possible to raise capital in addition to retaining profits of the period of 2017-2018, the bank can achieve credit growth of 14-16 percent under the management of the State Bank of Vietnam (SBV). But the prerequisite is to ensure the capital structure and control the CAR under Circular 41 not less than eight percent.
Shareholders assumed that if the capital was not raised, what would be the bank’s plan? Le Duc Tho said that the bank was required to increase the capital and was submitting to the authorities for implementation.
According to the management plan from 2020, VietinBank will apply Circular 41, so that the bank is developing an implementation scenario.
Shareholders questioned the 68-floor VietinBank Tower project in Ciputra urban area. In this regard, Le Duc Tho said that 15-16 investors expressed their desire to cooperate with VietinBank in this project. In particular, the bank signed security cooperation with nine investors to study and propose a plan to participate in.
Previously, VietinBank had proposed a policy to allow VietinBank Tower to restructure according to three options. Option one is to sell all works to investors and tenants to buy a part of the tower as a headquarters. Option two is to only retains the 68-storey tower as the headquarters and sells the rest. In case the two options have not been implemented, the bank will continue to promote the progress of the project.
