Vietinbank allowed to add $303.1 million to its capital

Monday, May 31, 2021 09:18

Transactions at Vietinbank. — Photo courtesy of the bank

The Government has approved supplementing capital of nearly VND7 trillion (US$303.1 million) for Vietinbank (CTG) to maintain the State ownership rate at the bank.

According to the decision, the additional capital will come from the bank’s share issuance to pay dividends from the after-tax profit after setting aside the funds in 2017 and 2018 as well as the remaining after-tax profit of 2019.

At the end of 2020, VietinBank approved a plan to issue more than 1 billion shares to pay dividends at a rate of 28.8 per cent from the above capital sources.

In addition, at the Vietinbank 2021 annual general meeting of shareholders held in April, the bank submitted two dividend plans. Under the first option, the bank will pay 5 per cent cash dividends and the remainder will be paid in stock dividends at the rate of 17.77 per cent.

Under this plan, at the time of dividend payment, VietinBank has not completed the capital increase from the share dividend from the previous years' profits. Charter capital when implementing the dividend is VND37.2 trillion.

According to the second plan, after paying a five per cent cash dividend, the bank will pay a stock dividend at the rate of 12.64 per cent. With this plan, at the time of dividend payment, VietinBank will have completed the capital increase through the share dividend from the previous years' profits, the charter capital when implementing the dividend payment is VND48 trillion.

The additional capital is an important basis for the bank to increase charter capital. The capital flow would create a solid foundation for the bank to expand its business activities, improve governance and financial capacity and maximise its potential. It would also increase shareholder benefits and contribute to national socio-economic development.

The increase in charter capital will contribute to improving VietinBank's credit rating according to the assessment of international credit rating agencies. — VNS

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