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Techcombank targets strategic investor and announces dividend
At Techcombank’s 2024 AGM on April 21, shareholder interest was notably high due to the bank's approach to dividends after several years of restrained distributions. Discussions also focused on seeking potential strategic investors to enhance shareholder value and on adopting a targeted approach to attract the affluent customer segment.
Concerns were aired about the potential impact of distributing a high one-time dividend on share price dilution - a common practice among banks to maintain stock price stability.
Techcombank’s CEO Jens Lottner elaborated on the bank’s prudential stance concerning debt and equity management.
“The reality is that rewarding shareholders with stock dividends does not impact our equity capital. It's merely a reallocation from one portion to another and should not affect the fundamental value,” Lottner said.
"While the share price might slightly decrease due to dilution, this could also present an opportunity for new investors to purchase Techcombank shares at an attractive price. A robust bank will see its share price recover and grow," he said.
For 2024, Techcombank plans to distribute a cash dividend of 15 per cent, based on the total number of outstanding shares at the record date. This rate projects a payout of approximately $220.16 million, sourced from the bank’s 2023 retained earnings after allocations to various reserves, as confirmed by the audited financial reports.
Lottner said that with Techcombank's substantial capital base, the bank could afford to distribute dividends sustainably without compromising its operations.
“With our leading capital structure, Techcombank can afford to pay dividends from this year onwards while ensuring the bank’s operational integrity,” he said.
Addressing another shareholder query about why Techcombank, despite being a large bank, did not have a higher credit limit compared to similar institutions, Lottner disclosed that the State Bank of Vietnam caps their credit limit at about 20-25 per cent.
He acknowledged that some banks might receive higher limits, which could spur faster growth, but rapid expansion could come at a cost, such as an increase in non-performing loans.
Regarding the low growth in customer numbers, Lottner emphasised quality over quantity.
"Techcombank may have fewer customers, but they are highly valuable and contribute significantly to our operations. Our focus is on quality, not quantity, as you can see from our market reputation driven by our assets, service excellence, and product offerings which attract high-quality clients," the bank's CEO said.
Lottner also noted that while management had considered models like those of Home Credit and FE Credit, such consumer finance company frameworks did not align with Techcombank’s risk management strategies, and there were no immediate plans to establish a separate consumer finance entity.
In response to queries about foreign shareholder strategy, Techcombank’s chairman Ho Hung Anh said that the bank was exploring opportunities similar to those at VPBank, indicating a possible openness to new investment partnerships.
"Currently, foreign investors own 22 per cent of Techcombank's shares, which permits us to allocate approximately 10 per cent to strategic investors. Techcombank is actively seeking potential strategic partners. We expect this strategy to allow for the issuance of shares at enhanced valuations, thereby delivering greater benefits to our shareholders," Anh said.
Anh concluded with a cautious outlook for 2024, considering the ongoing economic challenges, underlining a conservative approach in the bank’s strategic planning for the coming year.
Nguyen Xuân Minh, chairman of Techcom Securities (TCBS) - a subsidiary of Techcombank, also shared insights into the firm’s operations and wealth management division.
Minh outlined ambitious goals for 2025, saying "TCBS aims to reach five million customers and attain a capitalisation of $5 billion."
Expanding on socioeconomic shifts within Vietnam, Minh said, "As Vietnamese citizens increasingly accumulate wealth, diversification of assets becomes inevitable. This ranges from traditional investments like gold and real estate to mutual funds, bonds, stocks, and other financial instruments."
"Initially, our focus will be on the affluent middle class, representing 20 per cent of the population but controlling 80 per cent of the nation’s wealth. We will then broaden our reach. TCBS is strategically positioned to capitalise on Vietnam's growth in the upcoming years," he added.
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