State-owned banks get green light to pay dividends in stock

The four public banks have been seeking this for years to enable them to meet the Basel II capital adequacy norms.

The second Basel Accords prescribe capital of 8 percent of risk-weighted assets for financial institutions.

Vietcombank, the third largest lender by charter capital, plans to pay 18 percent dividend for 2018 in the form of stocks, while BIDV, the largest, wants to pay last year’s dividend of 7 percent by stock.

Vietinbank plans to capitalize last year’s profits though the rate is not known.

The National Assembly in June gave Agribank the green light to increase its charter capital by VND3.5 trillion ($150 million) by capitalizing part of its profits.

Vietcombank and BIDV last year increased their capital after years of waiting, but industry insiders said they need to increase it further.

Vietcombank increased its capital to VND37.1 trillion ($1.61 billion) in January last year by selling a 3 percent stake to foreign investors.

BIDV in November last year became the largest bank by charter capital, with VND40 trillion ($1.73 billion), after selling a 15 percent stake to South Korea's KEB Hana Bank.