VietinBank plans to increase chartered capital hinh anh 1VietinBank's chairman of Board of Directors Le Duc Tho delivered a speech at the 2020 annual general meeting of shareholders (Photo:
Hanoi (VNA) – The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) planned to increase its chartered capital from its accumulated profits or paying dividend by stocks. The plan is being completed by the competent State agencies to complete the legal procedures for implementation.

Chairman of VietinBank’s Board of Directors Le Duc Tho made the statement at its 2020 annual general meeting of shareholders held in Hanoi on May 23.

“The capital raising requirement of VietinBank is extremely urgent. Unlike other commercial banks, VietinBank could not raise capital through additional issuance solutions to investors due to its limitations: State ownership in joint stock commercial banks having State capital must not be less than 65 percent while the foreign investors' ownership percentage is a maximum of 30 percent," he said.

This year, the bank was assigned a credit growth limit of 8.5 percent by the State Bank of Vietnam (SBV). However, if the economy sees a good recovery, Vietinbank would submit to increase the limit.

VietinBank expected outstanding loans to grow by 4-8.5 percent in 2020. The mobilised capital would grow in line with the use of capital, balanced with the growth rate of outstanding loans, expected at 5 to 10 percent. Meanwhile, the non-performing loans (NPL) ratio would be controlled at less than 2 percent.

The bank has not set a specific profit target this year, but affirmed to ensure business effectiveness and improve its operation. It will closely follow changes and impacts of COVID-19 to update its profit plan based on the approval of authorities.

VietinBank clarified tasks in the restructure plan and resolving bad debts in the 2016-2020 period, improving profitability and renewing business structure, customers and managing growth quality.

VietinBank would meet requirements of Basel II as soon as it completes the equity capital increase. Especially, it would complete the development strategy in 2021-30 and middle-term business plan in 2021-2023. It would continue to restructure credit categories, increasing the portion of small-and-medium sized enterprises and retail segments while diversifying revenue structure.

“As the global and domestic economy faces many challenges, the whole system of VietinBank will implement practical and effective solutions to support businesses and people to overcome difficulties, having breakthrough developments after the COVID-19 pandemic,” the chairman said.

Responding to shareholders’ questions about bad debt, he said that it was difficult to predict the impact of COVID-19 because the pandemic had not been controlled. Influence from other countries would greatly affect an open economy like Vietnam.

The bank has implemented necessary support measures to accompany customers to stabilise production and business activities, offering many support programmes.

However, many customers of VietinBank are affected by decreasing incomes, affecting consumer loans, business and production.

VietinBank’s capital adequacy ratio (CAR) has been at 10 percent according to Basel I and 8.6 percent according to Basel II which is under SBV’s stipulated level.

The bank estimated that its profit would reach 6 trillion VND (258 million USD) by the end of the second quarter of the year. The bad debt rate would be controlled at 1.5 percent.

VietinBank bought 3.1 trillion VND from Vietnam Asset Management Company (VAMC) while the company still owned over 9 trillion VND, of which over 50 percent has been set aside./.