VPBank is the third bank after Vietcombank and MB to say they can receive a wire transfer from a weak bank.
This year’s annual meeting of Vietnam Prosperity Bank (VPBank) caught the attention of a large number of shareholders (several times more than every year) as the bank announced a series of plans from a huge capital raise, with profits exceeding the private banking sector, to the news from taking over a weak bank.
Responding to shareholders’ questions about the possibility of participating in the restructuring, Mr. Ngo Chi Dung, Chairman of the Board of Directors of VPBank, replied that the bank was considering transferring a weak credit institution. However, the bank did not publish detailed information and did not submit a report to shareholders at the meeting on April 29 in the afternoon. “Participation in forced bank restructuring, if any, will also have some impact, but it’s also early to confirm,” Dung said.
In front, vietcombank and MB presented to the shareholders the plan to approve the compulsory transfer of a credit institution among the four weak banks undergoing restructuring, including Dong A Bank (DongABank) and three compulsory purchase banks, namely Construction (DongABank). CB), Ocean (Oceanbank), Global Petroleum (GPBank).
The President of VPBank’s Annual Meeting on April 29, including Mr. Nguyen Duc Vinh – CEO of VPBank, Mr. Ngo Chi Dung – Chairman of the Board of Directors and Mr. Bui Hai Quan – Vice Chairman of the Board of Directors. Picture: VPBank
In addition to these contents, the focus is also on the capital increase plan and the business plan of VPBank.
This year, VPBank aims to double last year’s pre-tax profit to nearly VND30,000 billion, the number currently the highest profit in the group of private banks and only after Vietcombank.
This plan is based on expected loan growth of 35%, subject to State Bank approval, with outstanding loans increasing from Dong 384 trillion to Dong 518,400 billion. Total bank assets are expected to increase by 27.4% by the end of this year, and capital mobilization by 27.8%.
When asked about the goal of strong profit growth, Mr. Nguyen Duc Vinh, CEO of VPBank, replied that doubling the number is ambitious, but the bank has a specific strategy, aligns growth drivers and is confident in its growth. to plan. “VPBank had unusual income from insurance collaborations in the first quarter, but even after deducting these amounts, the business results were achieved on the basis of the established basis,” said Vinh.
A question that all banks have asked at recent annual meetings is the impact of the tightening of cash flow on real estate. VPBank’s CEO said that lending in this space accounts for less than 10% of outstanding loans. Loans to homebuyers for residential purposes now account for around 40%. “People’s need to buy homes to live in is a legitimate need and is not being curtailed, which is also a global trend. Lending to resorts and speculative real estate will be noticed and strictly controlled,” commented Mr. Vinh.
VPBank also plans to further increase its seed capital to become the bank with the largest capital scale in the system. Accordingly, this bank will increase its capital in two phases and increase its size from VND 45,056 billion to VND 79,334 billion.
In doing so, the bank plans to issue shares at 50% from sources such as undivided earnings, reserve funds to supplement initial capital in the second or third quarter. Thereafter, the bank will privately issue a maximum of 15% of the initial capital to foreign investors, bringing the total foreign ownership rate up to a maximum of 30%.
The bank also presented a plan to issue shares under the Employee Stock Selection Program (ESOP) with a volume of 30 million shares. This number will not carry over for three years, with annual release rates of 30%, 35%, and 35%, respectively.
The funds raised will be used to increase financial strength, expand operations, bring in capital, buy shares and collaborate with other banks and affiliates.
Another piece of content presented at today’s session was the acquisition of OPES Insurance Company by VPBank with an initial capital of VND 550 billion.
Accordingly, VPBank will buy 100% or most (expectedly more than 90%) at a price not exceeding 1.5 times the book value of the company. According to the CEO of VPBank, this deal does not conflict with the existing insurance contract with AIA, since OPES is a non-life product.
Regarding the necessity of the deal, Mr. Vinh said that since OPES is a company that develops digital products, there is no close relationship, even if only cooperation. According to the plan, VPBank will gradually increase its ownership rate to 100% and make OPES a subsidiary of the bank.