Vietnam Technological and Commercial Joint Stock Bank (Techcombank - HoSE: TCB) recently announced documents for the 2024 Annual General Meeting of Shareholders (AGM).
Accordingly, at the end of 2023, Techcombank showed a bright business situation when it exceeded the set targets. Specifically, the bank recorded total assets of VND 849,482 billion, an increase of 21.5% compared to 2022, pre-tax profit of VND 22,888 billion, a decrease of 10.5% compared to the previous year but still exceeding the set plan by 4%.
Techcombank explained that the decline was mainly due to the high interest rate environment, which caused the bank's cost of capital and net interest income to decrease by 8.6%.
In 2024, the bank plans to have a credit balance of VND 616,031 billion, 16.2% as approved by the State Bank. Total customer deposits are consistent with the actual credit growth rate, in order to optimize the balance sheet. The bank targets pre-tax profit in 2024 at VND 27,100 billion, up 18.4% over the same period.
At the same time, Techcombank also plans to submit to the General Meeting of Shareholders a 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 entitled to receive cash dividends.
The amount that this bank plans to pay in cash is nearly VND 5,284 billion. The source of dividend payment is the Bank's undistributed profits after setting aside funds as of December 31, 2023 according to Techcombank's audited separate and consolidated financial statements for 2023.
The implementation time and progress are expected in the second or third quarter of 2024. The specific time will be decided by the Board of Directors, ensuring compliance with legal regulations and the actual conditions of the Bank, ensuring the interests of shareholders.
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.
The expected source of equity capital used to increase charter capital includes: undistributed profit after tax, reserve fund to supplement charter capital and capital surplus based on Techcombank's audited separate financial statements and audited consolidated financial statements for 2023.
The expected issuance method is by exercising rights. The issuer is the existing shareholder whose name is on the list on the shareholder record date to exercise the right to receive shares from the increase in charter capital from issuing shares from equity capital.
The expected implementation period is in 2024 or until the bank completes the procedures required by law.
The current maximum foreign investor ownership ratio and after the capital increase will remain unchanged at 22.486% of charter capital. The additional capital is expected to be used to supplement Techcombank's working capital.
According to Techcombank, the increase in charter capital aims to improve the bank's financial capacity, operational capacity and competitiveness.
Thus, Techcombank's dividend and bonus share issuance policy presented to shareholders is a major change for Techcombank after 10 consecutive years of retaining profits to consolidate capital foundation and develop business .
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