Bank distributes dividend
Most recently, Vietnam International Commercial Joint Stock Bank (HOSE: VIB) announced January 19, 2024 as the ex-dividend date to close the list of shareholders receiving interim dividend in cash for 2023 at a rate of 6% (1 share will receive VND 600).
With nearly 2.54 billion shares outstanding, VIB estimated to spend over VND 1.52 trillion on this interim dividend. The expected payment date is February 21, 2024.
The cash dividend interim plan of VIB has been approved at the annual General Meeting of Shareholders in 2023. The plan is based on the profits achieved by VIB in the first 3 quarters of 2023.
In 2023, VIB was also the bank that paid cash dividends for the year 2022 with a total rate of 15%, divided into 2 interim payments. On March 3, 2023, VIB made the first interim cash dividend payment at a rate of 5%, and on May 5, 2023, the second interim payment at a rate of 10%. The total amount of dividend paid by VIB in the past year amounted to VND 2.108 trillion.
Furthermore, VIB has also completed the dividend payment in the form of stock at a rate of 20%, increasing its charter capital to VND 25.292 trillion.
Bac A Bank (HNX: BAB) announced January 11, 2024 as the ex-dividend date to close the list of shareholders receiving dividend in stock at a rate of 7.5% (1,000 shares will receive 75 new shares).
Accordingly, BAB is expected to issue over 62.5 million shares at the rate of 7.5% for shareholders. The total value of issuance at par value is over VND 625 billion.
The implementation source is from the accumulated undistributed profits in 2023 of BAB, after setting aside the funds, ensuring compliance with legal regulations and being approved at the General Meeting of Shareholders. If the issuance is successful, BAB’s charter capital will increase from VND 8.334 trillion to VND 8.959 trillion.
Saigon Commercial Bank (UPCoM: SGB) has been approved by the State Bank of Vietnam (SBV) to increase its charter capital by a maximum of VND 308 billion through the issuance of shares to pay dividends.
Earlier, the 2023 General Meeting of Shareholders of Saigonbank approved dividend payments to existing shareholders in the form of shares at a rate of 10%. Accordingly, Saigonbank plans to issue 30.8 million new shares to pay dividends, with a face value of VND 10,000 per share.
The last time Saigonbank increased its charter capital was in 2012, when it issued shares to existing shareholders. Since then, the bank’s charter capital has remained at VND 3.080 trillion.
In November 2023, Vietnam Prosperity Joint Stock Commercial Bank (HOSE: VPB) paid cash dividends at a rate of 10% (1 share received VND 1,000).
Not only VPBank, in 2023, many banks paid cash dividends. Asia Commercial Bank (HOSE: ACB) disbursed nearly VND 8.444 trillion from undistributed profits to pay dividends for 2022, with a total rate of 25%, including 15% in stock and 10% in cash.
Similarly, Ho Chi Minh City Development Joint Stock Commercial Bank (HOSE: HDB) completed the dividend payment for 2022 in the past year with a total rate of 25%, including 10% in cash and 15% in stock. HDBank’s charter capital increased from VND 25.303 trillion to over VND 29.076 trillion. The bank plans to allocate about VND 3,000 billion for additional capital to supplement long-term funding sources, while the remainder will support working capital for other activities.
Military Commercial Joint Stock Bank (HOSE: MBB) is also one of the banks that paid both cash and stock dividends in 2023. The 2023 General Meeting of Shareholders of MBB approved a dividend plan for shareholders with a total equivalent amount of VND 9.067 trillion, including a 15% stock dividend (VND 6.800 trillion) and a 5% cash dividend (VND 2.267 trillion). After completing the stock issuance, MBB increased its charter capital from VND 45.339 trillion to VND 53.683 trillion. With this capital increase, the bank aims to continue paying dividends for 2023 at a rate of 10-15%.
Will the money wave continue?
Dividends for 2023 will be based on the 2022 financial results and have been approved at the 2023 General Meetings of Shareholders of banks. However, with the less optimistic business results of 2023, will the dividend payment plans of banks this year be affected?
Mr. Tran Truong Manh Hieu – Head of Strategy Analysis Department of KIS Vietnam Securities Company believes that the dividend payment rate for 2023 by banks is based on the 2022 financial results. Although affected by the SCB – VTP event at the end of 2022, the overall business results were still good, as credit continued to grow.
However, in 2023, the situation is different. The economy is heavily influenced by global events. The debt that needs to be resolved from the VTP case also has an impact. Therefore, “banks will not pay high dividends or even no dividends. If they do, dividends will be paid in stock to increase the charter capital in order to meet safety standards,” Mr. Hieu commented.
In addition, the credit growth rate will depend on the health of banks’ financial statements. To have good health, banks’ charter capital must also grow. Therefore, banks will also prioritize paying dividends in stock to increase capital.
Mr. Phan Dung Khanh – Director of Investment Advisory of Maybank Investment Bank believes that the dividend payment plan for 2022 has been approved at the 2023 General Meetings of Shareholders and this plan will be difficult to change. If it does happen, the dividend payment plan will be adjusted slightly. As for the 2023 financial results, the dividend payment plan will be approved at the 2024 General Meetings of Shareholders.
Recently, Techcombank (TCB) has also revealed its long-term cash dividend payment plan, which is expected to be presented at the 2024 General Meetings of Shareholders in April, based on the business results and profit growth in recent years.
Techcombank plans to propose a minimum cash dividend payment rate of 20% of the annual after-tax profit, or 4-5% of the Bank’s equity at the beginning of the year, equivalent to about VND 1,500 per share. Techcombank believes that maintaining the cash dividend policy and ensuring the minimum tier 1 capital adequacy ratio of 14-15% is completely feasible.
Mr. Jens Lottner – CEO of Techcombank affirmed: “The transformation strategy and favorable business results in 2023 once again affirm the internal strength of the Bank, and at the same time create a solid foundation for future growth. This allows the Bank to plan a long-term cash dividend strategy for shareholders.”
Assoc. Prof. Nguyen Huu Huan – Lecturer at University of Economics Ho Chi Minh City (UEH) believes that the dividend payment plan will depend on the banks’ business results. The business results in 2023 are not as good as in 2022, so it is likely that banks will not pay dividends, or if they do, the dividend rate will be lower than previous years.
Depending on the strategy, banks will pay dividends in cash or stock. However, with the current high price of bank stocks, from the shareholders’ perspective, they would prefer to receive dividends in stock rather than cash as before. Banks will also consider this issue because if dividends are paid in stock, the capital will return to reinvest in the bank’s business. However, when paying dividends in stock, the number of shareholders will increase and may dilute the bank’s shares, increasing the number of shareholders.
By Cat Lam
