Vietcombank shareholders on April 19 approved a lower profit target for the year, cutting the bank’s estimated take this year by 10 percent from earlier forecasts to 4.5 trillion VND (236.84 million USD).

“Deposits are expected to grow more quickly than credit this year, but there will be more pressure from deposit interest payments, so we have cut profit estimates by 420 billion VND (22.11 million USD),” explained Vietcombank general director Nguyen Phuoc Thanh.

In the first quarter of this year, deposits rose by just 1-2 percent, while credit grew by 6 percent. First quarter profits were estimated at about 1.4 trillion VND (73.68 million USD).

Vietcombank projects deposits to grow by 23 percent this year, up from last year’s rate of 19.5 percent, while credit growth is projected to reach 20 percent, down from last year’s 25.9 percent. Total outstanding loans by the end of the year are projected to hit 169.94 trillion VND (8.94 billion USD), with bad debts to be kept under 3.5 percent.

The bank will double its risk provision fund this year to 1.5 trillion VND (78.9 million USD) and expects total assets by December 31 to grow by 15 percent over last year to 293.8 trillion VND (nearly 15.5 billion USD).

The general shareholders meeting also approved a plan to increase charter capital from 12.1 trillion VND (636.84 million USD) to 17.58 trillion VND (925.63 million USD).

“The capital increase aims to ensure a capital adequacy ratio of 10 percent of total capital, Thanh said, explaining that the increase would take place in two phases in the second and fourth quarters, in coordination with an offer of additional shares to existing shareholders at a ratio of 33:100. The shares would be priced at 10,000 VND per share.

Additional capital would be allocated to strategic investments, infrastructure improvements and increased credit growth, Thanh said.

The State Bank of Vietnam late last week was appointed the representative of State-owned capital in Vietcombank, replacing the State Capital Investment Corporation (SCIC), Vietcombank remains over 90.7 percent State-owned.

The State Bank elected Vietcombank chairman Nguyen Hoa Binh, general director Nguyen Phuoc Thanh and audit committee chairman Pham Huyen Anh to represent State interests on the board of management./.