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Banking & Finance

BIDV to pay 8.5% 2015 dividend in cash

Released at: 06:40, 24/10/2016

BIDV to pay 8.5% 2015 dividend in cash

Photo: Duc Anh

October 22 extraordinary shareholders meeting votes, among other things, to pay 2015 dividend in cash, not bonds.

by Duy Anh

The Bank for Investment and Development of Vietnam (BIDV) is set to payout 2015’s dividend by cash at a rate of 8.5 per cent per share, while the Vietnam Commercial Bank of Industry and Trade (VietinBank) has made no indication to the Ministry of Finance (MoF) on paying a dividend.

The State Bank of Vietnam (SBV) currently holds 95.28 per cent of BIDV’s charter capital, which means MoF will receive VND2.7 trillion ($120.96 million) in dividends.

The 2015 dividend payout plan was announced at an extraordinary shareholders meeting on October 22 along with changes in its legal representative, from the Chairman of the Board of Directors (BoD) to the CEO.

Its BoD suggested amending Article 2, Clause 5 of its constitution, which previously stated “the Chairman of the BoD shall be the legal representative of BIDV” and will “represent BIDV in international relationships, litigation, dispute resolution, dissolution and bankruptcy,” a BIDV press release stated.

The extraordinary shareholders meeting passed the amendment, which states “the CEO shall be the legal representative of BIDV,” with 100 per BIDV of votes.

One agenda item at the extraordinary shareholders meeting that has received much attention but not been discussed is the nomination of a new BoD Chairman to replace former Chairman Tran Bac Ha, who resigned in September. For now, BIDV’s CEO Phan Duc Tu has been given the position.

The BoD also announced the date for finalizing the list of shareholders to receive a dividend for 2015. The final registration date is expected to be November 4, with the payout day being November 21.

BIDV’s annual general meeting held in April saw a decision passed on a 2015 dividend payout that was less than initially planned (it was to be more than 9 per cent per share) and that shareholders would receive bonds, not cash.

As at the end of the third quarter, BIDV’s total assets stood at VND956 trillion ($42.82 billion), up 11.5 per cent compared to the start of the year and the highest among Vietnam’s joint stock banks.

Total credit and investment were more than VND912 trillion ($40.85 billion), a 14.2 per cent increase against the beginning of the year. Outstanding credit reached more than VND698 trillion ($31.27 billion), up 12.7 per cent, while its bad debt ratio was 1.72 per cent.

Total mobilized capital was more than VND887 trillion ($39.73 billion). Mobilized capital from economic organizations and individual customers reached VND754 trillion ($33.78 billion), 14.2 per cent higher compared to the beginning of the year.

The mobilized capital structure has changed positively towards stable capital sources from residential customers, with an outstanding balance of more than VND427 trillion ($19.13 billion), up 20 per cent compared to the beginning of the year and representing 57 per cent of total mobilized capital.

Retail activities continued to be strengthened and contributed significantly to business performance, with outstanding retail credit growing by 19 per cent compared to the start of the year and representing 24 per cent of the total. Net revenue from services stood at VND2.68 trillion ($120 million), up 13.3 per cent year-on-year.

Pre-tax profit reached VND5.62 trillion ($251.77 million) in the first nine months, up 6.9 per cent year-on-year and equal to 71 per cent of the annual plan.

MoF released an official document in June requesting the SBV direct the representative of State capital in BIDV and VietinBank to vote for the 2015 dividend payout to be in cash.

Under the plan submitted to VietinBank’s annual general meeting in April, 2016, there is to be no dividend payout for 2015.

Its Chairman was quoted as saying that “this is a necessary decision and has strategic meaning for the bank in improving its financial capability and ensuring its capital adequacy ratio (CAR) and continued development.” The central bank currently holds 64.46 per cent of its charter capital.

Besides wanting to keep all profits from 2015 for the bank’s development, VietinBank also proposed the government consider lifting the foreign ownership limit, in which the State would hold less than 50 per cent of charter capital. VietinBank said this would ensure the ownership and control of the State in the bank while also creating the conditions to attract more resources.

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