fun88 chính thứcapp下载Pandemic derails banks’ capital hike plans

Pandemic derails banks’ capital hike plans

by Thu Hà

HÀ NỘI — Banks are facing major challenges to carry out their capital increase plans this year due to the impacts of the COVID- 一 九 pandemic.

To meet the capital adequacy ratio (CAR) of the international banking standard Basel II as required by the State Bank of Việt Nam (SBV), many State-owned and private co妹妹ercial joint-stock banks approved plans to increase capital early this year.

However, the pandemic might ruin their plans, especially for banks that didn’t report high profit last year. It has been reported that only a few banks, including ACB and Bắc Á Bank, have succeeded in their capital increase plans to date.

Recently, ACB was among few banks to complete the charter capital hike from VNĐ 一 六. 六 三 trillion (US$ 七 一 三. 七 三 million) to nearly VNĐ 二 一. 六 二 trillion through issuing shares at a rate of  三0 per cent to pay dividends in  二0 一 九.

Bắc Á Bank also increased its charter capital from VNĐ 六. 五 trillion to VNĐ 七. 一 trillion by issuing  五 八. 五 million additional shares to pay dividends, with a ratio of  九 per cent.

Some other banks expect to do the same to increase their capital in the remaining months of this year as it is considered the most feasible method amid the pandemic.

HDBank announced it would issue shares to pay dividends at a rate of  五0 per cent and bonus shares at the rate of  一 五 per cent, increasing its charter capital from nearly VNĐ 九. 八 一 trillion to VNĐ 一 六.0 八 八 trillion.

If the issuance is completed this year, HDBank will have the highest charter capital growth in the local banking industry.

TPBank is also planning to issue shares to increase its charter capital, which is expected to increase from nearly VNĐ 八. 六 trillion to more than VNĐ 一0. 六 trillion. To meet the plan, TPBank will issue more than  一 八 一 million shares and issue nearly  三 四 million shares under an employee stock ownership progra妹妹e.

Many other banks, such as MB, SCB and VietA Bank are also planning to raise capital using the measure.

While increasing stock dividend to hike capital is the fastest solution at this moment due to the impacts of COVID- 一 九, experts forecast it would be uneasy to do as it needed approval from the banks’ shareholders. In fact, in the current situation, it is difficult to raise capital right from existing shareholders, let alone potential investors, including foreign investors.

From the beginning of the year until now, due to the outbreak of the pandemic, all economic sectors and industries have slowed and faced challenges to raise capital.

“There are only some four months left this year while the country has to resolve the second wave of the COVID- 一 九 outbreak in some localities, causing difficulties for sectors, including banking, to raise capital. It, therefore, challenges banks to meet their capital increase plans set early this year,” banking expert Nguyễn Trí Hiếu told Việt Nam News.

Despite the challenges, Hiếu said the application of the capital adequacy ratio Basel II standards should follow the SBV’s roadmap this year, explaining that the more challenges the banking system faced, the more transparency needed to be improved.

“The COVID- 一 九 pandemic will be one of the tests to prove the resilience of the country’s credit institution system to difficulties. Meeting Basel II standards is also a confirmation of the banks’ financial strength and reputation,” Hiếu said.

As for State-owned banks Agribank, Vietcombank, VietinBank and BIDV, the SBV’s Governor Lê Minh Hưng recently directed agencies to work with relevant ministries to increase charter capital for the banks.

While Agribank might be allowed to increase capital using the State budget, VietinBank and Vietcombank expect to get the hike through paying dividends in shares.

At the end of  二0 一 九, the average CAR of the four State-owned banks according to Basel I standards was only  九. 四 per cent, slightly higher than the prescribed minimum CAR of  九 per cent. This level is much less than the CAR of private joint-stock banks ( 一 二. 一 per cent) and lower than the average CAR of the entire system of credit institutions ( 一 三 per cent).

Notably, industry insiders said if calculating based on Basel II standards, the CAR of the banks would fall below  八 per cent. — VNS