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Banks plan to increase capital
Many commercial banks including Agribank, Vietinbank, Asia Commercial Bank (ACB) and Sacombank plan to increase charter capital this year, Dau tu (Viet Nam Investment Review) newspaper reported.
Agribank expects to add VND10 trillion (US$480 million) to make its charter capital VND31 trillion ($1.48 million).
Tran Phuong Binh, general director of DongA bank said: "DongA Bank will increase charter capital from VND4.5 trillion ($215 million) to VND6 trillion ($290 million) this year to raise its competitiveness."
Great Trust Commercial Bank (TrustBank) aimed to increase its charter capital to VND5 trillion ($240 million) from the current VND3 trillion ($145 million), Hoang Van Toan, chairman of the bank said, adding the move was essential to enhance financial capacity and competitiveness.
According to Trinh Van Tuan, General Manager of Orient Commercial JS Bank, OCB had applied for their foreign partner BNP Paribas Bank to hold 20 per cent of its charter capital when the bank raises it to VND3 trillion from the existing VND2.6 trillion ($125 million).
Ha Van Tham, Chairman of OceanBank, said the bank would raise charter capital to VND5 trillion from the current VND3.5 trillion ($168 million).
"OceanBank has also set the target to gain pre-tax profit of VND800 billion ($38.3 million) against VND690 billion ($29 million) of last year. And it expects to pay a 12-per-cent dividend on 2011 profits," Tham said.
Though the deadline to implement Decree No.141/2006/ ND-CP, which stipulates minimum legal charter capital of commercial banks must be VND3 trillion by late 2010, has been extended by one year to the end of 2011, most small banks have fixed their minimum compulsory authorised capital at VND3 trillion.
Only about four banks including GiaDinh Bank and Ficombank have not finished the process of increasing capital, the paper reported.
It is harder for small commercial banks to raise charter capital than big banks, because the VN-Index and bank share prices are down given the government's currency tightening policy.
The small banks' highly competitive deposit interest rates are also causing them problems to extend their outstanding credit, so they need to exercise caution when announcing profit targets for this year.
vietnamnews
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