The Bank for Investment and Development of Viet Nam (BIDV) has proposed a plan to its shareholders to increase its chartered capital this year by 28 per cent, compared to the end of 2017.

In the plan which was unveiled at the bank’s annual general shareholder meeting on April 21, BIDV proposes to add VND9.45 trillion (US$418.2 million) to its chartered capital, so the figure would reach VND43.65 trillion by the end of 2018.

Specifically, BIDV will issue 965 million ordinary shares with a face value of VND10,000 per share. Of the total, more than 171 million shares will be sold to the public through an initial public offering or private placement, 603.3 million shares to be sold to foreign strategic investors under private placement, and over 171 million shares sold under the Employee Stock Ownership Plan (ESOP).

The increase in chartered capital is part of BIDV’s plan to increase its equity to meet the minimum capital adequacy requirement set by the State Bank of Viet Nam, which is aligned with Basel II.

The move is also expected to help the bank improve the credit rating results of international institutions, enhance prestige in its business operations, and improve its financial capacity and competitiveness, in both domestic and international markets.

Also, the bank commits to use added capital in the business areas of BIDV, with reasonable guidance to ensure the capital is used with efficiency and maximises benefits to shareholders.

Cash dividend payment

Regarding the profit distribution plan in 2017, the Board of Directors has submitted to shareholders to approve the cash dividend payment plan at the rate of 7 per cent. The total amount of dividends is nearly VND2.4 trillion. The remuneration of the Board of Directors and Board of Supervisors in 2018 will be, at maximum, 0.44 per cent of the profit after tax in 2018.

In 2018, BIDV sets the target of credit growth of up to 17 per cent; before-tax profits of VND9.3 trillion; a bad debt ratio below 2 per cent; and a dividend payout ratio is expected to range from 5 to 7 per cent.

At the meeting, BIDV General Director Phan Duc Tu said that in 2017, BIDV continued to be the market leader, maintaining its position and market share in the industry. Accordingly, its total assets reached over VND1.2 quadrillion, up 19.5 per cent, compared to 2016. Total deposits of the bank reached VND 1.12 quadrillion, up 19.7 per cent over the beginning of the year.

The consolidated profit before tax was VND8.6 trillion, up 13 per cent year on year, exceeding the target set by the General Meeting of Shareholders in 2017, with a return on assets reaching 0.63 per cent and a return on equity (ROE) of 5 per cent. — VNS