HDBank to pay 25% dividend, persist with sustainable growth plans

Thursday, Apr 06, 2023 16:10

An HDBank transaction office in HCM City. HDBank will pay a dividend of 25 per cent in cash and shares for 2022. — Photo courtesy of the bank

The Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank, stock code: HDB) will pay a dividend of 25 per cent in cash and shares for 2022, in the process increasing its charter capital to VND29.27 trillion (US$1.25 billion), according to documents it released on April 4 ahead of its annual general meeting.

The high dividend is thanks to efforts to maintain high growth last year amid the general difficulties that hit the economy.

HDBank’s lending portfolio focuses on sectors that are key contributors to economic growth, and so its outstanding loans to the property sector are low, as are its corporate bond holdings.

Thanks to the strategy, HDBank exceeded all business targets, with profit before tax being nearly VND10.27 trillion (US$435.8 million), a 27.2 per cent rise from 2021 and 105 per cent of the target.

The return on equity and return on assets were 23.5 per cent and 2.1 per cent, both higher than last year.

The bank’s standalone NPL ratio was only 1.3 per cent and the consolidated rate was 1.67 per cent, low compared to industry averages.

HDBank owns only VND4.3 trillion ($183.19 million) worth of corporate bonds, equivalent to just 1.6 per cent of total outstanding loans.

Its capital adequacy ratio, which is stipulated under the Basel II agreements, was 13.4 per cent, among the highest in the sector.

At the end of last year its total assets exceeded VND416 trillion ($($17.7 billion), 7.8 times up from 2012, while deposits and equity were VND260 trillion ($11.1 billion) and VND39 trillion ($1.66 billion), up 6.9 and 7.2 times.

Its profit before tax was an all-time high of VND10.27 trillion, 24 times up from 10 years earlier.

HDBank is one of the few banks that consistently pays high dividends.

This year HDBank orients credit growth in association with credit restructuring to improve efficiency and safety and keep consolidated bad debts at below 2 per cent.

It also plans to expand digital products and services and make efforts to improve service quality and the customer experience, besides enhancing the application of the best international standards, especially Basel III.

In 2023 it targets an increase of 25 per cent in total assets to VND520 trillion ($22.2 billion) and of 25 per cent and 24 per cent in deposits and loans outstanding to VND459.4 trillion ($19.6 billion) and VND333.6 trillion ($14.2 billion) (in line with the credit growth targets prescribed by the State Bank of Vietnam).

Considering its good asset quality and high profitability, HDBank targets an increase of 29 per cent in profit before tax to VND13.2 trillion ($562.8 million).

It targets ROE and ROA of 24.5 per cent and 2.3 per cent in 2023.

Its standalone and consolidated NPL ratios will continue to be kept at below 1.5 per cent and 2 per cent.

With a solid foundation following 10 years of reforms, a leadership comprising experienced entrepreneurs with a good reputation in the international market, HDBank is confident of achieving, even exceeding, its targets.

The AGM will be held on April 26 both online and offline. — VNS

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