Vietcombank to maintain lending standards

Hanoi (VNS/VNA) -  Vietnam’s largest bank Vietcombank will not lower lending standards in the post-pandemic stage to keep capital healthy in 2020, chairman Nghiem Xuan Thanh has said.

The bank will raise the quality of credit to cope with the country’s economic development after the COVID-19 pandemic is over, he said at the bank’s annual shareholder meeting on June 26.

Vietcombank will overhaul business activities to reduce the quantity of lending and increase retail sales, which include service charging and capital investment, the chairman said.

The bank will look for new customers, review wholesale credit policy, increase investing in financial bonds and improve its banking investment division, Thanh added.

In 2020, Vietcombank eyes total asset rising 7 percent year-on-year to 1.3 quadrillion VND (55.9 billion USD). Raised capital is projected to gain 8 percent year-on-year to 1 quadrillion VND and outstanding loans are forecast to increase by 10 percent year-on-year to 815.5 trillion VND.

The bad debt ratio is set to be kept below 1.5 percent in 2020, with the dividend rate 8 per cent for this year and the bonus paid in cash or shares.

Vietcombank did not set a specific earnings target for 2020.

The performance will be decided upon Vietnam’s economic development in the post-virus stage and the earnings plan will have to be pending for the central bank’s approval, chairman Thanh said.

At a meeting in mid-April, deputy governor of the State Bank of Vietnam Dao Minh Tu asked all State-controlled banks to cut at least 40 percent of total profit to help local businesses deal with COVID-19.

Vietcombank recorded little annual change in its six-month profit. The figure in the first half of 2019 was 11.3 trillion VND.

In 2020, the bank will raise its charter capital by issuing bonus shares and selling shares in a private deal to raise its capital adequacy ratio (CAR) to the minimum 9.24 percent under Basel II standard.

Vietcombank will issue dividend shares at an 18 percent ratio to up charter capital by 6.67 trillion VND to 43.76 trillion VND in the third or fourth quarter of the year.

In addition, a maximum of 241 million shares or 6.5 percent of the bank’s capital, will be sold in a private deal to raise some 2.41 trillion VND for charter capital.

The bank also plans to hire more than 2,200 new employees in 2020./.