After a decade of retaining profits, Techcombank plans to pay dividends at a yield of 5% per year, equal to bank savings.
At a recent conference with investors, General Director of Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Mr. Jens Lottner said: "For the past 10 years, we have been consistent with the policy of retaining all profits for reinvestment. But now is the time for us to reconsider."
Affirming that Techcombank is still pursuing the reinvestment orientation to ensure growth momentum, however, according to Mr. Jens Lottner, retaining too much capital unnecessarily is not beneficial.
"We believe that with the current level of capital and the ability to maintain a 20% annual growth rate, paying annual dividends in the coming time is feasible. We will ask for specific shareholders' opinions on this plan at the upcoming shareholders' meeting," said Mr. Jens.
Speaking further about this plan, Mr. Phung Quang Hung, Deputy General Director of Techcombank, said that the bank plans to pay cash dividends of at least 20% of its annual after-tax profits. The estimated dividend payout ratio is equivalent to 15% of the current par value.
"That means, investors who buy and hold TCB shares at the current market price can enjoy a return of about 5% per year, equivalent to the interest rate on savings deposits at banks. This ensures benefits and regular cash flow for shareholders, especially long-term shareholders," said Mr. Hung.
At the meeting, many shareholders also raised questions about the risks of Techcombank's real estate lending segment in the context of a difficult market.
Regarding this issue, Mr. Nguyen Anh Tuan, Deputy Director of Techcombank Retail Bank, said that real estate loans currently account for 40% of the bank's total outstanding loans, including loans to real estate developers, construction enterprises, manufacturers and suppliers of construction materials...
"Techcombank has a different risk management model with a management value chain from input to output. This synchronous approach has so far proven effective in managing cash flow from end to end and controlling risks," said Mr. Tuan.
The bad debt ratio for businesses, including real estate, according to a Techcombank representative is almost 0% despite the downturn in the industry cycle. This shows Techcombank's understanding and careful selection when working with partners. As for the personal real estate loan segment, according to the bank representative, this risk is dispersed across all sectors of the economy depending on the income and sector of the borrower.
2023 will be a challenging year, but Techcombank's bad debt ratio by the end of 2023 will be 1.19%, much lower than the target of 1.5%. In addition, Techcombank always sets aside risk provisions in the most prudent and safe manner, Mr. Tuan said.
At the meeting, Ms. Le Thanh Hang, the bank's Investor Relations Advisor, also said that the outstanding balance of restructured loans under Circular 02 until the end of 2023 is below VND2,000 billion. With the current customer situation, according to her, the risk of bad debt transfer is very low. The bank has also made 100% provision for this group while Circular 02 only requires a 50% provision. In case Circular 02 is not extended, Ms. Hang affirmed that this will have almost no impact on Techcombank's operating results.
Quynh Trang
Source link
Comment (0)