Techcombank shareholders are about to receive a huge dividend.

Techcombank (HoSE: TCB), a Vietnamese commercial bank, recently published the documents for its 2024 annual general meeting of shareholders.

Accordingly, at the end of 2023, Techcombank showed promising business prospects, exceeding its set targets. Specifically, the bank recorded total assets of VND 849,482 billion, an increase of 21.5% compared to 2022, and pre-tax profit of VND 22,888 billion, a decrease of 10.5% compared to the previous year, but still exceeding the target 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 achieve a loan balance of VND 616,031 billion, representing 16.2% of the amount approved by the State Bank of Vietnam. Total customer deposits will be aligned with the actual credit growth rate to optimize the balance sheet. The bank aims for a pre-tax profit of VND 27,100 billion in 2024, an increase of 18.4% compared to the same period.

At the same time, Techcombank also plans to present to the General Meeting of Shareholders a plan for dividend payment and capital increase. Accordingly, with the retained earnings of 2023, after deducting funds, Techcombank plans to distribute cash dividends at a rate of 15% (1,500 VND per share), calculated on the total number of outstanding shares at the time of the record date for receiving cash dividends.

The amount this bank plans to pay out in cash is nearly 5.284 billion VND. The source of dividend payment is the bank's undistributed profits after the allocation of funds as of December 31, 2023, according to Techcombank's audited separate and consolidated financial statements for 2023.

The timing and implementation schedule are projected for the second or third quarter of 2024. The specific timeframe will be decided by the Board of Directors, ensuring compliance with legal regulations and the Bank's actual conditions, while safeguarding 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 the issuance of shares from equity capital.

Accordingly, the bank plans to issue an additional 3.5 billion shares with a total value of VND 35,335 billion, each share having a par value of VND 10,000. The exercise ratio is 100%, meaning that shareholders owning 100 entitled shares will receive an additional 100 new shares.

The equity capital expected to be used to increase the charter capital includes: undistributed after-tax profits, the charter capital reserve fund, and share premium based on Techcombank's audited separate and consolidated financial statements for 2023.

The planned issuance method is through the exercise of rights. The recipients are existing shareholders whose names are on the shareholder list as of the record date to exercise their right to receive shares from the increase in charter capital through the issuance of shares from equity capital.

The expected timeframe for implementation is within 2024 or until the bank completes the procedures required by law.

The current maximum foreign investor ownership ratio, and the one remaining unchanged after the capital increase, is 22.486% of the 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 enhance the bank's financial capacity, operational capabilities, and competitiveness.

Thus, Techcombank's dividend distribution and bonus share issuance policy presented to shareholders represents a significant change for Techcombank after 10 consecutive years of retaining profits to consolidate its capital base and develop its business .

Source