State-owned lenders pay dividends with shares to hike capital

By Quynh Trang   November 17, 2023 | 04:46 pm PT
State-owned lenders pay dividends with shares to hike capital
BIDV Tower in Hanoi's Hoan Kiem District. Photo by Duong Duc Diep via BIDV's Facebook page
Three of the “Big Four” state-owned lenders either will pay dividends with shares as a way to raise capital this year.

BIDV has recently announced that Nov. 29 will be the date of record for the payment, in which a shareholder will receive 12.69 shares for every 100 he or she owns.

The bank seeks to raise its charter capital by 12.69% to VND57 trillion ($2.35 billion) through the payment.

VietinBank plans to pay dividends with shares in either this or next month its at the rate of 11.7% to increase its capital to VND53.7 trillion.

Vietcombank in August paid dividends with shares to increase its charter capital by 18.1% to VND55.89 trillion.

VPBank is now the biggest lender in terms of charter capital, followed by BIDV, Vietcombank, VietinBank and Agribank.

In the last eight years this is the second time that state-owned lenders were approved to pay dividends with shares. In most years they paid with cash.

Payment with shares is important to state-owned lenders as they need to increase the capital adequacy ratio.

Of the Big Four lenders, Agribank is in the most urgent need for capital hike. Its capital adequacy ratio by the end of 2021 was at 7% compared to Vietcombank’s 9.98%, VietinBank’s 8.54% and BIDV’s 8.4%.

By the end of last year Agribank had the lowest charter capital of the four at VND34.45 trillion and even lower than some private lenders such as Techcombank, MB and VPBank.

The National Assembly has approved for Agribank to increase its charter capital by VND6.75 trillion in this and next year, but the bank has yet to announced specific details.

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