return icon

Government backs capital hike plans for four State-owned banks

 The Government supports the policy of allowing four State-owned banks to raise charter capital, said Governor of the State Bank of Viet Nam (SBV) Le Minh Hung.



Vietinbank could retain profits in 2018 and 2019 to serve the capital hike plan. — Photo



These four banks are Viet Nam Bank for Agriculture and Rural Development (Agribank), Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) and Bank for Investment and Development of Viet Nam (BIDV).

At a recent meeting reviewing last year’s performance of Vietinbank, Minh said four State-owned banks have contributed more than VND92 trillion (roughly US$4 billion) to the State budget in the past five years, of which VND60 trillion was tax and VND32 trillion was dividend payments.

But these banks have not raised charter capital during that period.

Minh said the Government has allowed the banks to increase capital as they need more funds to ensure growth and provide capital to the economy to help maintain the country’s high economic growth.

He said Vietinbank could retain profits in 2018 and 2019 to serve the capital hike plan, but profits of 2019 and 2020 need evaluation to be consistent with its business activities.

The Ministry of Finance is revising regulations to report to the Government about the capital hike plan for these banks. Minh said Vietinbank needed to report to the finance ministry about its capital plans based on its 2019-20 growth and business results.

The Governor also said current regulations allow banks with more than 50 per cent of State capital to issue bonds to increase tier 2 capital (supplementary capital) without permission from the central bank.

In 2019, Vietinbank reported profits of nearly VND11.5 trillion ($496 million), up 26 per cent over its yearly plan and up 83 per cent compared to 2018. By the end of the year, the bank had assets of VND1.24 quadrillion, up 6.5 per cent compared to the previous year, while outstanding loans reached VND952 trillion, up 7.2 per cent.

Total deposits increased 5 per cent to VND892 trillion. Its bad debt ratio was reduced to less than 1.2 per cent from 1.59 per cent in 2018.

Vietinbank targets a 10 per cent growth for pre-tax profit this year on the basis of not raising capital. Total assets, loans and deposits are expected to growth by 6-10 per cent.

However, in 2020, the Governor asked the bank to better control the growth of risky assets, quickly divest from non-performing investments in the past year and focus more on priority areas. In addition, the bank must reduce at least 30 per cent of the internal bad debt and bad debt at Vietnam Asset Management Company (VAMC).

Vietcombank and BIDV have yet to disclose business results of the whole year of 2019, while BIDV on Wednesday posted a record pre-tax profit of VND10.8 trillion last year. — VNS

Only one bank entered bourse in 2019

Only one bank entered bourse in 2019

Eighteen commercial banks are listed on the bourse, but only one bank entered the bourse in 2019.  

The highlights in the banking sector in 2019

The highlights in the banking sector in 2019

2019 witnessed low credit growth rate.



HCM City to be next destination of Italian Film Festival 2022

2023 AFF Club Championship schedule, structure announced

The 2023 ASEAN Football Federation (AFF) Club Championship will start on September 27 2023, and end on May 15, 2024, the AFF Competition Committee announced at an online meeting on Monday.

HCM City’s dengue fever deaths highest in decade

HCMC recorded some 25 deaths due to dengue by October 2, the highest in a decade, according to the HCMC Center for Disease Control.

Hospitality providers in Hanoi Old Quarter revive

Hospitality providers in Hanoi’s Old Quarter have been gradually recovering from the COVID-19 pandemic. Since March 15, most of them have so far been brought back to life.

After discovery of fake VietGAP-certification, 12 units under probe

After local media reported about vegetables with counterfeited VietGAP certificates, the Ministry of Agriculture and Rural Development (MARD) asked for a review of 12 certification units and threatened to strictly punish any violators.

Another three Vietnamese digital platforms qualify for being popularized

Vietnam is expected to maintain its seventh place in the number of new app downloads globally.

Foreign travel website suggests 10 best things when visiting Vietnam

Kayaking in the waters of picturesque Cat Ba island and taking a food tour to sample delicacies around Ho Chi Minh City are among the 10 best things to do in Vietnam, according to UK-based travel website Time Out.

Vietnam’s coconut kingdom protects organic coconut areas by biological methods

When the trend of consuming organic products is increasingly popular, the development of organic material sources has become an urgent requirement. Protecting these sources has become a great concern of producers in many countries around the world.

Electronics industry capacity must keep up with increased investment

Vietnam needs policies to enable the electronics industry to ready its supply chain as the country becomes ever more attractive for investment, Deputy Director of the Industry Agency under the Ministry of Industry and Trade Pham Tuan Anh said.

VN central bank shifts up interest rates to combat US Fed adjustments

After the State Bank of Vietnam implemented the new operational interest rate on September 23, all joint-stock commercial banks, with the exception of state-owned ones, have adjusted the deposit interest rate for most terms.

HCM City targets international cruise tourists

Ho Chi Minh City has great potential to attract international cruise tourists as part of an effort to speed up tourism recovery post-pandemic, experts said.

Waste criteria lacking for nation’s IPs

Vietnam’s industrial parks are in the process of transitioning to more ecological models, but are struggling due to a lack of regulations on reusing treated waste and wastewater.

Vietnam experiences solid rise in production

The Vietnamese manufacturing sector rose solidly inside growth territory at the end of the third quarter of the year.

VN-Index bounces back from two-year low

The benchmark VN-Index on Wednesday regained the 1,100-point landmark after falling to a two-year low, but low liquidity may threaten the market recovery in the next sessions.