VietNamNet Bridge - The State Bank of Vietnam (SBV) has said that dividends each commercial bank can pay to their shareholders must not be higher than 9 percent.

SBV has told commercial banks that the dividends they can pay depend on their business results, provisioning and non-performing loan settlement processes.

The CEO of a HCM City-based joint stock bank said SBV had decided to intervene in commercial banks’ business to ensure that commercial banks respect the regulations on making provisions against bad debts.

The banker said he plans to pay dividends of five percent, but is awaiting a decision from the board of directors.

Before the State Bank decision, VIB Bank planned to pay a dividend of 11 percent to shareholders in cash. SBV said the profit needs to be used to improve the bank’s financial capability and settling of bad debts.

LienViet Post Bank has also received a document from SBV which said the bank could pay dividends of no more than 6 percent instead of the planned 10 percent.

Meanwhile, Nguyen Thanh Toai, deputy CEO of ACB, one of the largest Vietnamese joint stock banks, said ACB initially planned to pay 9 percent, but it has been told by SBV to pay 7 percent. 

Nguyen Van Tuan, the shareholder of a HCM City-based bank, complained that he still has no information about the dividend he can expect this year, while the date for the shareholders’ meeting has not been fixed.

Tuan said he received a dividend of 5 percent in cash and 10 percent in shares last year. 

However, Tuan does not expect higher dividends this year, though the bank has reported satisfactory business results, because he knows banks have to settle bad debts first.

SBV has once again shown its strong determination to force commercial banks to speed up settlement of bad debts.

Several days ago, it released a decision about the bad debt amount that commercial banks have to sell to the Vietnam Asset Management Company (VAMC), a company set up by SBV to help settle bad debts.

A banker complained that SBV had interfered in banks’ business by setting dividends the banks can offer.

He said that under current laws, the dividends are determined by shareholders after considering last year’s profits and business performance. 

Meanwhile, the main job of SBV, as the watchdog agency, is to create a transparent legal framework for commercial banks.

NLD