The largest local commercial bank, Vietcombank (VCB). (Source: VNA)
Hanoi (VNA) - The largest local commercial bank, Vietcombank (VCB), will increase its charter capital to over 39.7 trillion VND (1.78 billion USD), said chairman Nghiem Xuan Thanh at the bank’s recent general shareholder’s meeting.

Thanh said the added capital of 9.3 trillion VND was from the issuance of 933 million bonus shares for the existing shareholders of the bank.

He said that the bank will offer about 360 million shares or a 10 percent stake to foreign investors in a private placement. After raising charter capital, the dominant share of the State would reduce from 77 percent to 70 percent. Mizuho Bank, the second largest shareholder of the bank, is considering participating in the private placement to at least maintain the current ownership level at the bank.

Thanh said that by the end of Q1, the VCB’s capital source had increase by 2.7 percent, higher than the average growth in the banking industry. He said despite offering the lowest interest rates in the market, its brand and competitive products help the bank’s capital to grow.

Credit within the quarter also increased by 6.5 percent, while the non performing loans (NPL) ratio was down slightly by 1.76 percent compared to the beginning of the year. The bank also reported profits before tax of 2.3 trillion VND, up 61 percent over the same quarter last year.

By the end of 2015, the total assets of the bank had reached 674 trillion VND, up 16.9 percent compared to the beginning of the year. The total profits before tax reached 6.8 trillion VND. This year, VCB expected to earn 7.5 trillion VND in profits, a 10 percent increase from 2015.

Shareholders of Vietcombank have already received a 10 percent cash dividend worth 2.7 trillion VND for 2015, and the bank plans to pay a dividend of 10 percent in cash this year as well.

The bank also planned to pay 0.35 percent of its profit margin to its director board and supervising board this year. So with the target of 7.5 trillion VND, leaders of the bank are expected to have a combined income of 26.5 billion VND this year.

Even before the additional capital, the bank already was the largest bank in charter capital in Vietnam with 26.65 trillion VND, second only to Vinamilk on the Vietnamese stock market.

However, Vietcombank said it aims at not only to be the No 1 bank in Vietnam, but also to be placed in the top 300 financial banks with the best management in the world by 2020.

The bank said it would also consider spending on M&A activities this year.

Currently, Vietcombank holds a 7 percent stake in Military Bank (MBB), an 8.2 percent stake in Export and Import Bank (EIB), a 5 percent stake in Orient Commercial Bank (OCB), a 4.3 percent stake in Saigonbank and more than a 10 percent stake in Cement Finance Company.-VNA