Many banks postpone plans on raising capital
24-JUL-2008 Intellasia | 22/Jul/2008 Dau Tu Chung Khoan page 26
Jul 24, 2008 - 7:00:00 AM
|
Together with an announcement on paying dividend at 15% for 2007, the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has asked for opinions from shareholders about changing its plan on issuing shares in 2008. Namely, Sacombank cancelled its plan on issuing additional shares, which are equal to 20% of the bank's chartered capital of 4.449 trillion dong, to existing shareholders, cancelled the bank's plan on issuing three million shares to its key officials and cancelled its plan on issuing over 1.285 million shares to foreign investors. Meanwhile, Sacombank's plan on scaling up its chartered capital to 6.048 trillion dong was approved at the annual shareholders' meeting held in March 2007.
Although some banks are still trying to raise chartered capital as committed with shareholders, the realistic movements show that not only Sacombank but also many other banks are having to changing their plans.
According to Tran Xuan Huy, Sacombank's general director, amidst the current complicated movements of the market, issuing more shares should not be surely successful. Huy explained that banks by this time must promote their internal capacity. However, the government's policy on closely controlling capital supply in the market together with the central bank's credit tightening measures has forced Sacombank to postpone the above plan, said Huy.
Huy added that reining credit growth at 30% or less this year will cause difficulties for banks in developing credit market share. If chartered capital is increased but the credit market share is narrowed, the increased capital will hardly be efficient.
That schedules on raising chartered capital of some small-scaled banks have not yet specified implementation routes is also attributed to the above reason. On the other hand, because of sharp slash of prices of bank shares made many banks worried over issuing more shares to raise capital. Even though share prices of some banks are equal to par value, many banks still worry that they will be hard to complete their plans on raising capital because bank shares are now not as attractive as previously.
With a plan on scaling up chartered capital from 1.6 trillion dong to three trillion dong this year, the Eastern Asia Commercial Joint Stock Bank (EAB) has lately been approved to raise the chartered capital by 240 billion dong from the previous year's capital surplus. The remaining shares worth 1.160 trillion dong will be issued to existing shareholders in December however the share issuance will still depend movements of the capital and monetary market.
The Asia Commercial Bank (ACB) has recently been allowed to increase its chartered capital from 2.63 trillion dong to over 5.8 trillion dong. The increased capital will mainly come from reserve source and capital surplus of ACB in the previous year.
Leaders of some small banks admitted that in short-term, capital surplus of the previous year will be used to raise capital. However, whether additional shares will be issued or not will mainly depend business activities of banks. Raising capital but not being able to scale up business activities will place leaders of banks in high pressures on paying high dividend rates.
|
| |
|  |
|
Advertising
