Carrying out the important task of the whole industry, at the beginning of 2024, two large banks, Techcombank and BIDV, will present this restructuring plan to shareholders.
Building a sustainable development system of credit institutions
The restructuring project for the 2021-2025 period was officially issued by the Prime Minister in Decision 689/QD-TTg dated June 8, 2022. The project aims to create a clear and substantial shift in restructuring the system of credit institutions associated with handling bad debts; building a system of healthy and sustainable credit institutions.
Techcombank has just set the final registration date as January 23, 2024 to collect shareholders' written opinions on approving the Restructuring Plan for the period 2021-2025.
In addition, the Project aims to develop the system of credit institutions, in the direction that domestic credit institutions play a key role, operate healthily, with quality, efficiency, openness, transparency, and meet the standards of banking safety as prescribed by law. Along with that, it is approaching international practices, aiming to reach the development level of the Group of 4 leading countries in the ASEAN region.
That is also the reason why, in recent times, following the roadmap of the whole industry, many banks have submitted restructuring plans to shareholders for approval and reported to the State Bank. This is also an action that is of interest and highly appreciated by shareholders and investors, helping them to have a comprehensive assessment of the financial situation of the bank, at the same time better understand the bank's business plan in the current period, ensuring effective and safe operations in the future.
And at the beginning of 2024, two major banks, Techcombank and BIDV, will submit to shareholders for approval the Plan "Restructuring the system of credit institutions associated with bad debt settlement for the period 2021-2025". Specifically, Techcombank has just set the last registration date as January 23, 2024 to collect shareholders' opinions in writing on approving the Restructuring Plan for the period 2021-2025. At BIDV, on January 30, the bank will hold an extraordinary General Meeting of Shareholders in 2024 to submit for approval the Restructuring Plan, in addition to electing additional members of the Board of Directors and members of the Supervisory Board for the term 2022-2027.
These steps demonstrate the seriousness of banks in implementing the requirements of the State Bank and the Government to develop a healthy and sustainable banking industry. In addition to approving the Restructuring Plan, banks also submitted to shareholders permission for the Board of Directors to proactively develop, complete, and amend the Plan according to the requirements of the management agency, and perform other necessary tasks during the implementation process.
Previously, in 2023, many banks also approved restructuring plans. For example, in December 2023, VPBank obtained written opinions to approve the restructuring plan for the period 2021-2025. At the same time, Eximbank's General Meeting of Shareholders approved the Board of Directors' proposal on the restructuring plan until 2025. In May 2023, VIB held an extraordinary shareholders' meeting to approve the content of the restructuring plan associated with bad debt settlement for the period 2021-2025.
Important goals
The restructuring plan of banks includes many contents, not only focusing on handling bad debts and improving asset quality.
Specifically, the restructuring plan includes solutions to improve financial capacity, credit quality, operational efficiency, business administration, and operational transparency. In particular, banks need to outline a roadmap for increasing capital and improving the quality of their own capital, and increasing the capital safety ratio according to international standards. Some large reputable banks may propose the solution of listing shares on the international market.
In particular, in the context of the 4.0 industrial revolution, banks must also have plans to modernize operations, digitally transform, and develop cashless payments.
In building a vision and business strategy, banks must clearly define strategies for each period, have a brand development plan, etc. Banks must evaluate strengths, weaknesses, difficulties, challenges and trends that may affect operations.
Another important content in the restructuring plan is the continued application of advanced risk management standards, including the continued implementation of Basel II. Banks will also have a roadmap for network development, sustainable development plans, promoting green credit, developing non-credit service activities, etc.
Banks will briefly review the results achieved in the previous 5 years, and update the financial situation to the most recent time, thereby pointing out limitations, shortcomings, difficulties, problems and lessons learned.
Banks accelerate restructuring plan implementation
In fact, these contents are not too strange because they have appeared in part in the announced business strategies of banks and have been strongly implemented by them in recent times.
At Techcombank, the bank has a strategy to transform the financial industry, enhancing the value of life in the period of 2021-2025. This bank aims to have a CASA ratio of 55% by 2025, a market capitalization of 20 billion USD, making Techcombank one of the most valuable banks, a ROE ratio of 20%, and a ratio of net fee income/total operating income of about 30%.
Regarding the goal of improving equity capital and ensuring capital adequacy ratio (CAR), at the end of the third quarter of 2023, Techcombank is the bank with the highest equity capital in the system, reaching more than VND 127 trillion. At the same time, the Bank also owns the highest CAR ratio in the industry, at 15%, nearly double the Basel II requirement (8%). Asset quality is tightly controlled with a bad debt ratio of 1.4%, among the banks with the lowest bad debt ratio.
Techcombank is also at the forefront of digital transformation in the banking industry. In recent years, the Bank has maintained its leading position in technology investment, applying world-leading platforms as well as AI and Big Data to practical operations, thereby helping the customer base grow rapidly and surpass the 13 million customer mark.
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