According to the documents for 2020 Annual general Meeting (AGM) released by Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), the bank’s chair Le Duc Tho stated that from the beginning of 2020, the Covid-19 outbreak has negatively affected the world economy; severely hit the economies of countries; caused production stagnant, supply chain disruption, and trade and investment decline.
With the increasingly deep participation in the global supply chain, the openness of the economy is fairly large, thus, so Vietnam’s economy has been significantly suffered from the Covid-19 epidemic, said VietinBank’s leader. A number of industries have been negatively impacted, particularly enterprises operating in the fields of aviation, transport, petroleum, tourism, service, trade, and import and export.
The system of credit institutions (CIs), especially state-owned banks, plays the key role in providing capital to the economy, and at the same time is responsible in sharing difficulties with businesses, people, and joining hands with the community in the fight against the epidemic. The business activities of CIs in general will face many challenges due to the difficulties of the economy. “Thus, to ensure continuous business activities, timely respond to the needs for banking capital and services of the economy, from the early year, VietinBank has developed action scenarios to respond to the situation of the disease outbreak and plans to strongly recovery the business activities immediately after the epidemic is over,” said the head of VietinBank.
According to the bank’s Chair, year 2020 is very important and is the final year in the roadmap for implementing the restructuring scheme associated with dealing with bad debts of VietinBank. In 2020, VietinBank does not set a specific profit plan but will follow closely the developments and impacts of the disease to calculate and update the profit plan.
In 2020, the bank aims to expand total assets by one to three percent, and outstanding credit by four to 8.5 percent (the credit growth limit assigned by the State Bank of Vietnam (SBV) is 8.5%), and capital mobilisation from economic organisations and people by five to 10%. VietinBank expects to control on-balance sheet bad debts below two percent.
Regarding dividend policy, VietinBank’s Board of directors (BOD) proposed shareholders the plan to retain all profits, equivalent to a zero percent cash dividend ratio. The bank’s BOD also emphasized the key tasks for 2020.
Specifically, the bank will continue to follow the plan of increasing charter capital; and maximise the measures to increase equity such as accumulating internal profits, paying dividends in share, proposing the development of new capital raising channels, issuing secondary bonds, improving investment efficiency, contributing capital, and controlling risk-weighted assets in order to reduce the pressure of increasing equity capital.
“VietinBank will apply Basel II as soon as the charter capital is raised,” said the bank’s BOD representative.
In addition, the bank will complete the development strategy to 2030 and the medium-term business plan in the period of 2021 2023 with a number of key orientations including intensive development in depth, growth associated with strong improvement in efficiency, credit portfolio restructuring, higher proportion of small and medium enterprises (SMEs) and retail customers, revenue structure diversification, and effective financial and cost of capital management.
Along with that, VietinBank will strongly transform the growth model, developing the business scale at a reasonable pace along with the strong restructuring of business structure and drastic improvement of business quality and efficiency,
VietinBank will simultaneously deploy new breakthrough business solutions, develop link chains in practical, coherent and efficiency manner, provide an overall financial service solution for each customer/ group of customers, and develop modern products and services based on advanced technology, especially in the field of payment.
In addition, VietinBank also aims to promote the recovery bad debts, debts sold to Vietnam Asset Management Company (VAMC), and improve asset quality.
