The State Bank presents a capital increase plan for 4 big banks

The State Bank of Vietnam (SBV) has just issued a report on the additional evaluation of the results of the socio-economic development plan in 2022, the implementation of the socio-economic development plan, and the banking activities in the first months of 2023 to the Economic Committee of the National Assembly.
The State Bank of Vietnam (SBV) said it is coordinating with relevant ministries and sectors to consider and submit to the competent authorities for approval a plan to increase charter capital from after-tax profits after setting aside funds for the 2021-2023 period for joint stock commercial banks where the State holds more than 50% of charter capital (Vietcombank, Vietinbank, BIDV) and from the state budget (Agribank).
At the same time, the SBV submitted to the Prime Minister a plan to supplement state capital in Vietcombank by paying dividends in shares from the remaining profit in 2019 and 2020 after paying cash dividends.
Notably, the SBV also submitted a draft report to the National Assembly on the plan to increase Agribank's charter capital to the Prime Minister.
As an operator, the State Bank has also directed Vietcombank, Vietinbank, and BIDV to draft a strategy to enhance charter capital from after-tax revenues, which the Prime Minister approved in 2021.

The plan to increase the capital of the Big 4 group

Based on the data published by the State Bank, by the end of January 2023, the charter capital of four state-owned commercial banks (Agribank, Vietcombank, VietinBank, and BIDV) reached VND 180,400 billion. Total assets exceeded 7.3 million billion VND.
The Big 4 group has mobilized capital from Market 1 with more than 5.8 million billion dongs. Outstanding loans to market 1 reached 5.3 million billion dongs.
Previously, as Sputnik newspaper reported, at the 2023 annual general meeting of shareholders in April, Vietcombank Chairman Pham Quang Dung said that VCB is implementing three capital increase contents.
According to Mr. Dung, Vietcombank increased its capital from the profit in 2020 and the remaining profit in 2019 with the issuance rate of 18.1% approved by the Government. On April 19, the State Bank of Vietnam also approved the capital increase plan of Vietcombank. Thus, within about one month, Vietcombank will complete the capital increase.
Capital increase based on 2021 earnings, and the remaining accumulated profit comes before 2018 with a rise of approximately VND 27,000 billion. The State Bank and the Ministry of Finance have agreed upon the capital increase policy and are preparing procedures to submit to the competent authorities for approval. The National Assembly must approve the capital described above increase, according to regulations.
According to CafeF newspaper, to Vietcombank's private placement plan for foreign investors, this bank is implementing procedural steps and is stopping hiring a financial consulting organization. According to this plan, Vietcombank will implement it in 2023 - 2024.
Deputy General Director Phung Nguyen Hai Yen told more about the dividend plan that Vietcombank would pay a stock dividend from the profit in 2020, and the remaining gain in 2019 at the rate of 18.1% will be implemented steps and implementation in May 2023.
Also read: Banks to issue billions of shares to pay dividends for the rest of 2022 » Breaking News, Latest World News Updates - VietReader Viet Nam
For Agribank, on April 25, the Government issued a Resolution on additional investment in charter capital for this bank. Accordingly, the Governor of the State Bank will be authorized by the Prime Minister, on behalf of the Government, to report to the National Assembly on additional charter capital for Agribank in the 2021-2023 period by 17,100 billion VND.
Additional capital for the Bank for Agriculture and Rural Development will be taken from the 2023 central budget expenditure estimate approved by the National Assembly, over VND 6,750 billion. The remaining nearly 10,350 billion VND will be allocated from the State budget and transferred in 2024.
As for VietinBank, this bank plans to increase its charter capital by issuing shares to pay dividends from the remaining profit in 2021 and the remaining profit accumulated until the end of 2016.
Vietinbank leaders said 12,330 billion dongs of retained earnings to pay dividends in shares. The issue volume is more than 1.2 billion units.
Previously, according to Tien Phong Newspaper, VietinBank's 2022 annual general meeting of shareholders approved a plan to increase charter capital from more than 48,000 billion VND to 53,700 billion VND. However, it still needs to be completed source for implementation from the remaining profit in 2020.

The State Bank appoints a representative of the state capital at BIDV.

Particularly at BIDV, the Bank for Investment and Development plans to increase its charter capital to more than 61,557 billion in 2023 through two issuances of shares.
Also read: BIDV becomes largest bank in Vietnam by total assets » Breaking News, Latest World News Updates - VietReader Viet Nam 
Phase 1, the bank will issue nearly 642 million shares to pay dividends to shareholders, the rate of 12.69% of outstanding shares as of December 31, 2022; charter capital will increase by more than 6,419 billion dongs.
In the second phase, BIDV privately issues or offers the public more than 455 million shares (expected 9% of charter capital as of December 31, 2022). Charter capital under this plan will increase by VND 4,552 billion.
BIDV plans to use 11,634 billion dongs of retained earnings in 2022 to pay stock dividends, equivalent to 23% of charter capital as of December 31, 2022.
Recently, the State Bank of Vietnam (SBV) announced the decision of the Governor of the State Bank of Vietnam to appoint a representative of the state capital at BIDV.
According to the decision of the Governor of the State Bank, Mr. Dang Van Tuyen - A member of the Board of Directors of BIDV for the term 2022 - 2027, was appointed as the representative of 30% of the State capital at BIDV from April 28.
Previously, the General Meeting of Shareholders of BIDV agreed to elect Mr. Dang Van Tuyen, Director of the Organization and Personnel Department of the State Bank, to the BIDV Board of Directors for 2022 - 2027.
Mr. Dang Van Tuyen (born in 1973) used to work at the State Bank from April 1996 to the present and went from the position of expert to Inspector of the Central Bank, Specialist, Deputy Head, Head of the Department of Organization and Personnel Department of the State Bank; Deputy Director of the Department of Organization and Personnel of the State Bank of Vietnam.
Overall, Vietnam's state-owned banks are doing well. The newly released consolidated financial statements for the first quarter of 2023 showed that the three state-owned joint-stock commercial banks, Vietcombank, BIDV, and VietinBank, continued to maintain their growth momentum, of which the strongest was BIDV (52.8%), Vietcombank (13%), and VietinBank had the lowest growth rate (3%).