Capital hike could mitigate Agribank's profit drop

By Quynh Trang   June 2, 2020 | 02:00 am PT
Capital hike could mitigate Agribank's profit drop
The logo of Agribank seen on a building in Ho Chi Minh City. Photo by Shutterstock/StreetVJ.
Agribank’s expected 20 percent drop in profits this year could be kept to 15 percent with a capital infusion, a top executive said.

Deputy director Nguyen Thi Phuong told VnExpress that due to the impact of the coronavirus outbreak, her bank’s pre-tax profit could fall by a fifth to VND11 trillion ($474 million).

But an 11 percent increase in charter capital could cushion the fall, keeping it at VND12 trillion ($517 million), a 15 percent decline from last year, she said.

It would also help the bank achieve the 9-10 percent credit growth target set by the State Bank of Vietnam, she said. The wholly state-owned bank’s capital has remained at VND30.6 trillion ($1.3 billion) for nine years.

The government has sought the National Assembly’s green light to increase its capital by VND3.5 trillion ($151 million) by capitalizing part of its profits.

The bank, one of the ‘big four’ public lenders, had a capital adequacy ratio of 9.2 percent at the end of last year, barely above the minimum rate of 9 percent required by the State Bank of Vietnam.

Agribank accounts for half of the credit provided to the agricultural sector.

Its pre-tax profit last year almost doubled to VND14.2 trillion ($612 million), second only to Vietcombank’s VND21.1 trillion ($1 billion).

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