Proposal to increase capital by more than 20,000 billion VND for Vietcombank

At the working session on the afternoon of September 24 of the National Assembly Standing Committee, State Bank Governor Nguyen Thi Hong said that the additional State capital at Vietcombank is consistent with the development strategy and the project to restructure credit institutions associated with handling bad debt until 2025.

The additional capital for Vietcombank is VND20,700 billion, expected to be taken from the remaining accumulated profit until the end of 2018 and the remaining profit in 2021 of the bank. This amount is nearly equal to the consolidated pre-tax profit of the first half of this year of this bank.

According to Governor Nguyen Thi Hong, with the additional resources, Vietcombank will meet the minimum capital safety ratios as prescribed, increase its potential and support the restructuring of weak credit institutions.

During the review, Chairman of the Economic Committee Vu Hong Thanh said that the proposal to increase capital for this bank ensures legal basis and is within the authority prescribed by regulations.

However, the Economic Committee proposed that the Government seek the opinion of foreign strategic shareholder Mizuho Corporate Bank – the unit holding 15% of Vietcombank’s charter capital. This is to facilitate the capital increase process.

The audit agency also noted that the increased charter capital should be used for business expansion, credit growth and economic support policies of this bank, instead of investing in information technology and digital transformation, respectively VND9,526 billion and VND17,155 billion.

“The Government needs to carefully assess the impact of adding State capital to Vietcombank on the development of the banking sector and socio-economic efficiency,” said Mr. Thanh.

Vietcombank is one of four state-owned commercial banks, along with BIDV, VietinBank and Agribank. In the first half of this year, the bank’s consolidated pre-tax profit reached VND20,835 billion, up 1.6% over the same period in 2023. With this data, Vietcombank continues to lead the entire banking system in terms of profit in the first 6 months of the year. This is also the highest first-half profit of this bank.

As of June 30, the bank’s total assets reached more than VND 1.9 million billion, up 3.6% compared to the end of 2023. Of which, customer loans were nearly VND 1.37 million billion, up 7.8%.