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Sacombank to pay cash dividend
Shareholders of Sacombank (HOSE: STB) have approved a plan for the bank to pay a 15-per-cent cash dividend in 2010 and offer additional shares to existing shareholders, as well as to increase the bank's charter capital this year to over VND10.7 trillion (US$511.7 million).
Sacombank's plan to pay a cash dividend but then offer additional shares drew market attention last week, with many investors seeing the scheme as a way to "force" shareholders to buy more shares.
STB Chairman Dang Van Thanh said that the bank had intended to simply pay dividends in the form of shares during 2001-10 in order to ensure the reinvestment of profits in the bank. However, he said, under Ministry of Finance regulations, shares issued as dividends to institutional shareholders could not be recorded as income and the bank was "responsible to harmonise the interests of all shareholders".
Currently, 47 per cent of STB shareholders were institutional, Thanh said, and the new plan would give individual shareholders the option of receiving the cash dividend or reinvesting it in the bank by taking advantage of the share offer.
Under the plan, the bank would sell shares representing 2 per cent of total capital, or 18.3 million shares, to bank employees, while shares would be offered to both existing shareholders and to employees at a price of just VND10,000 (US$0.48) per share. STB shares closed on the market yesterday at VND13,800 ($0.66).
Sacombank has targeted growth in charter capital and total assets at an annual rate of 15-20 per cent during 2011-20. Deposits were projected to increase 15-18 per cent and outstanding loans, 18-20 per cent, per year during the period.
This year, it targets to raise its total assets to VND160 trillion ($7.65 billion) and total outstanding loans to VND90.5 trillion ($4.32 billion). It also expects to earn a pre-tax profit of VND2.7 trillion ($129.1 million).
Thanh admitted that the profit estimate was conservative, saying that profit was likely to be closer to VND2.9 trillion ($138.7 million) "if the economic situation were not too difficult." Sacombank posted a pre-tax profit of VND652 billion ($31.2 million) in the first quarter.
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