SCB about to increase capital to over 20tr dong and register on UPCoM

02-Jun-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

On the morning of May 29, Sai Gon Joint Stock Commercial Bank (SCB) conducted its 2020 annual shareholder meeting to discuss its operation plans. Notably, in 2020, in the plan to promote restructuring in phase two, SCB deployed a plan of increasing 5 trillion dong of charter capital, bringing the total charter capital to 20.231 trillion dong.

Increasing capital, registering transactions on the Unlisted Public Company Market (UPCoM)

Vo Tan Hoang Van, general director of SCB, said that in the past year, SCB had implemented the application of standards under Decree 41/2016/TT-NHNN. In 2020, SCB continued to increase capital to improve capital adequacy ratio (CAR).

In this year’s plan, SCB would issue 500 million shares to existing shareholders, domestic and foreign investors, with the offering price of not less than 10,000 dong per share. The implementation time expected to be in 2020 and completion of issuance from 2020 to 2021.

After successful issuance, SCB’s chartered capital would increase from 15.232 trillion dong to 20.231 trillion dong.

With that proceeds, the Bank expected to spend 4 trillion dong to supplement business capital, 500 billion dong to invest in fixed assets and information technology, and 500 billion dong to invest in constructing, repairing, and upgrading headquarters operations and brand identity system.

In 2020, SCB aimed to increase its total assets by 12.19 percent to 637.166 trillion dong. Loans to customers and market mobilisation respectively increased by 13 percent to 377.283 trillion dong and 553.092 trillion dong. The Bank had not disclosed profit targets.

The Board of directors of the Bank also submitted to the shareholders for approval of the registration of shares with SCB stock code at the Vietnam Securities Depository (VSD) and registration of stock transactions on UPCoM.

At that meeting, shareholders approved the dismissal report of the Board of directors members for the term from 2017 to 2022 for Mai Thi Thanh Thuy. SCB elected an additional member of the Board of directors to replace the vacant personnel, Bui Anh Dung deputy general director of SCB.

In 2019, SCB continued to step up handling and setting aside 2.373 trillion dong of risk provisions, bringing the total reserve of SCB to the end of 2019 to over 11 trillion dong. Therefore, the remaining after-tax profit was only over 150 billion dong.

Concentrate resources on handling bad debts

Facing the question from a shareholder of why the Bank had not yet shared dividends, Vo Tan Hoang Van said that was also a concern of the Board of directors.

Currently, the shareholder income that the Bank was holding was 1.234 trillion dong, in which the retained profit was over 700 billion dong, and the chartered capital supplementing fund was 521 billion dong.

However, if SCB paid dividends, it would be against the regulations of the State Bank of Vietnam (SBV).

At Directive No. 02, SBV had asked commercial banks to proactively review and cut operational expenses, especially salaries and bonuses, promptly adjust business and financial plans in line with the reality before holding the general meeting of shareholders. Accordingly, in the immediate future, no cash dividend would be distributed to focus resources to sharply reduce lending interest rates on current loans and new loans.

Besides, SCB was undergoing restructuring and focusing resources to handle bad debt, so it had not received dividends. Therefore, the source of 1.234 trillion dong would be kept. After completing the restructuring process and resolving bad debts, the provision would be reversed, and dividends would be shared with shareholders.

To date, SCB’s risk reserve fund had increased to over 11 trillion dong.

According to Van, regarding the market’s difficult situation due to the Covid-19 epidemic, the operations of banks were affected, since the production and business activities of enterprises were stalled. Still, SCB would keep salaries for employees.

On the other hand, in the problematic context of the Covid-19 epidemic, a series of businesses had asked banks to restructure, delay debts, so SCB must also share with customers to overcome this period.


Category: Finance, Vietnam

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