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Banking & Finance

VIB releases 2017 business plan prior to AGM

Released at: 09:06, 14/04/2017

VIB releases 2017 business plan prior to AGM

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Plan released on April 12 with AGM scheduled for April 27.

by Duy Anh

Prior to its annual general meeting (AGM) in Hanoi on April 27, Vietnam International Bank (VIB) released its business plans on April 12, in which it targets pre-tax profit of VND750 billion ($33 million) this year, 7 per cent higher than last year’s result.

It also targets VND120 trillion ($5.3 billion) in total assets, up 15 per cent, and will strive for a minimal decline in its credit balance with the Vietnam Asset Management Company (VAMC) and for non-performing loans (NPLs) to be at less than 3 per cent.

The bank’s goals include a credit growth plan, with two options: 16 per cent credit growth previously approved by the State Bank of Vietnam (SBV) and 32 per cent estimated by the Board of Directors (BoD) based on its risk management capability and the economy’s priorities, dependent upon SBV approval. 

Its BoD also proposed a plan to mobilize funds, expected to cost up to VND7 trillion ($308.7 million), on the secondary market for up to ten years in order to strengthen its capital adequacy ratio (CAR) and other financial indicators to serve its business.

Adhering to VIB’s policy of paying dividends and bonus shares at a high rate in 2014 and 2015 (23 per cent and 25 per cent respectively), in 2016 the bank’s BoD proposed a dividend and bonus share payout plan at a maximum rate of 44.6 per cent of charter capital, including 5 per cent in cash (depending on SBV approval) and 39.6 per cent in bonus shares (including 3.5 per cent accumulated profit, 20.5 per cent capital surplus, and 15.6 per cent reserve fund for charter capital supplement).

In another plan, VIB will not distribute dividends in cash but offer 44.6 per cent in bonus shares (including 8.5 per cent accumulated profit, 20.5 per cent capital surplus, and 15.6 per cent reserve fund for charter capital supplement).

The BoD also submitted a plan to pay bonus shares to bank employees at 0.4 per cent of charter capital, equivalent to VND23 billion ($1 million). “2017 will be a promising year, with the bank focusing on targets for sustainable growth and expansion,” according to its statement.

VIB recorded significant achievements last year thanks to its efficient, safe, and sustainable development, and focused on sustainable sources of revenue, cost optimization, and efficient risk management. It was rated by Moody’s as among the group of banks having the highest financial strength for three consecutive years from 2014 to 2016.

Pre-tax profit last year increased 7 per cent against 2015 to VND702 billion ($31 million) while total assets rose 24 per cent to VND104.5 trillion ($4.6 billion), 16 per cent higher than the target.

Credit growth has been at 25 per cent for two consecutive years, now standing at approximately VND70 trillion ($3.1 billion). The bank re-purchased 30 per cent of debts sold to VAMC while controlling its NPLs at under 3 per cent.

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