"Ambition" to double charter capital
On the morning of April 20, the 2024 Annual General Meeting of Shareholders of Vietnam Technological and Commercial Joint Stock Bank (Techcombank - HoSE: TCB) took place successfully, approving many important contents such as dividend payment and charter capital increase.
At the Congress, sharing about the 2024 business plan, Techcombank General Director Jens Lottner said that based on the foundation of 2023 and predictions for 2024, Techcombank's Board of Directors proposed a profit of VND 27,100 billion in 2024. The bad debt ratio will be controlled below 1.5%.
Mr. Ho Hung Anh, Chairman of the Board of Directors of Techcombank, said that 2022 and 2023 are two difficult years for the world in general and Vietnam in particular. Techcombank also faces many difficulties, especially in areas where the bank is very strong, such as real estate and financial investment.
Chairman of Techcombank Board of Directors Ho Hung Anh.
However, the bank has also demonstrated its risk management capacity. For example, in the bond market, Techcombank does not let any bonds become overdue in terms of interest and principal, ensuring safety for customers.
In addition, investing in technology and data helps Techcombank reduce operating costs, creating conditions for the bank to gradually develop segments that were not previously its strengths such as SMEs, unsecured loans, and consumer loans. Technology support allows Techcombank to develop rapidly while managing risks and costs.
“In 2023, Techcombank achieved its set plan. In 2024, realizing that the market still had many challenges, Techcombank cautiously made a plan. I believe that consolidating and promoting strengths, using technology platforms and data will allow us to enter other economic sectors and segments, and strictly control risks,” Mr. Ho Hung Anh shared.
Techcombank's General Meeting of Shareholders also approved the plan to pay dividends and increase charter capital. Accordingly, with the retained earnings of 2023, after setting aside funds, Techcombank plans to pay cash dividends at a rate of 15% (1 share receives VND 1,500), calculated on the total number of shares outstanding at the time of closing the list of eligible shareholders to receive cash dividends.
According to Mr. Ho Hung Anh, the bank has not paid cash dividends in the past 10 years. The most recent stock dividend was in 2019.
After 10 years of consolidating the bank, the last 3 years recorded an average profit of 1 billion USD. With the above conditions, the bank can completely pay dividends while still ensuring safety index. At the same time, Mr. Hung Anh expressed hope that in the coming years, the bank can continue to pay dividends while still ensuring growth targets and ensuring shareholder rights.
Regarding the plan to increase charter capital, Techcombank's Board of Directors plans to increase charter capital from over VND 35,225 billion to over VND 70,450 billion through issuing shares from equity capital.
Accordingly, the bank plans to issue an additional 3.5 billion shares with a total value of VND35,335 billion, each share has a par value of VND10,000. The exercise rate is 100%, corresponding to shareholders owning 100 shares with rights to receive 100 new shares.
Techcombank General Director Jens Lottner speaks at the Congress.
When questioned by shareholders about whether paying a one-time dividend at a very high rate of 100% would affect the stock price, Mr. Jens Lottner said that rewarding shares to shareholders does not affect equity but only transfers from one part to another.
It may affect the stock price to be diluted, to decrease a little bit, but this is also an opportunity for other investors to buy TCB shares at a suitable price. If the organization is seen to be good, the stock price will grow again.
Customer quality is important
During the discussion session at the meeting, shareholders also raised many questions about Techcombank's business and operational plans in the coming time.
Some shareholders believe that while other banks increase their customer base by 6-7 million people a year, Techcombank increases its customer base by 2.6 million. Does this affect the bank's competitive advantage?
According to Mr. Jens Lottner, what Techcombank cares about is the rate of customers using products and services, not the number of customers.
“Techcombank always ensures that the customer service system is most profitable. Currently, Techcombank's profits come from a small number of customers. Although the number of customers is small, they are very valuable. The important thing is the quality of customers, not the quantity,” Mr. Jens Lottner emphasized.
Sharing about the plan to expand foreign room or find foreign strategic shareholders in the near future, Mr. Ho Hung Anh said that Techcombank's current foreign room is 22%, this ratio allows TCB to issue 10% to strategic shareholders.
Techcombank is also considering issuing to strategic shareholders. Normally, issuing to strategic shareholders will have a higher share price, which brings mutual benefits to shareholders. Last year, VPBank successfully did it with SMBC, Techcombank is also studying such an opportunity. Accordingly, Techcombank is looking for opportunities and hopes that when the market is better, it will meet them.
Explaining why Techcombank did not participate in acquiring weak banks to get a higher credit growth extension, Mr. Jens Lottner said that this is a question that each bank must decide for itself.
When deciding to accept a compulsory transfer, it also requires large costs to support those weak banks. Therefore, the bank's management must consider this issue very carefully.
I don't think Techcombank is lagging behind other banks in the industry because when comparing financial indicators, Techcombank still ensures similarity with the general index of the whole industry .
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