Capital increase plan left open for 10 years
Viet A Commercial Joint Stock Bank (VietABank) was established on July 4, 2003 on the basis of merging Saigon Finance Joint Stock Company and Da Nang Rural Commercial Joint Stock Bank.
From its establishment until 2010, the position of Chairman of the Board of Directors of VietABank was held by Mr. Do Cong Chinh, holding more than 555,000 shares in the bank. Mr. Chinh was the representative of the bank's major shareholder at that time, Saigon Jewelry Company (SJC) (owning more than 11 million shares).
In 2011, SJC officially divested all capital from VietABank, and Mr. Phuong Huu Viet's Viet Phuong Investment Group JSC became the largest shareholder, owning 11.62% of the bank's charter capital.
The remaining major shareholders include Hoa Binh Investment and Development JSC (9.79%), Vietnam Export Import Bank (Eximbank) (8.51%) and Ho Chi Minh City Party Committee Office (6.76%).
In August 2011, Mr. Phuong Huu Viet officially assumed the position of Chairman, replacing Mr. Do Cong Chinh. In this year, the bank also completed its plan to increase capital to VND3,098 billion.
In 2021, after a decade of association, Mr. Phuong Huu Viet resigned from the position of Chairman of the Board of Directors of VietABank. Mr. Phuong Thanh Long, Mr. Viet's nephew, was officially appointed as Chairman of the bank's Board of Directors for the 2018-2023 term.
In the 2023 management report, Mr. Phuong Thanh Long does not hold any shares at VAB, while Mr. Phuong Huu Viet owns more than 24.5 million VAB shares, equivalent to 4.55% of Viet A Bank's charter capital.
In 2012, when it had just changed ownership, VietABank set out the ambition to increase its charter capital to VND5,000 billion, an increase of over 61%. However, the above plan was continuously delayed and it was not until the end of 2022 that VietABank successfully increased its charter capital to over VND5,399 billion.
At present, the capital scale of this bank is still among the banks with the lowest charter capital in the system, only higher than some other banks such as BVBank, VietBank, KienlongBank, BaoVietbank, SaigonBank and PGBank.
In 2024, VietABank continues to plan to increase its charter capital to VND 7,505 billion through the issuance of up to more than 210 million shares to the public.
In addition, this year VietABank also plans to list all outstanding shares on the Stock Exchange when market conditions are favorable, in accordance with legal procedures. VietABank currently has nearly 540 million shares traded on the UPCoM exchange since July 20, 2021.
Nearly 1,000 billion VND of debt is at risk of losing capital
Regarding business results, since Mr. Phuong Huu Viet took over as Chairman of VietABank's Board of Directors, in 2012, the bank's net interest income decreased by 18% compared to the previous year. The bank reported a profit after tax of VND164 billion, down 35%. The bank's bad debt ratio this year was 4.65%.
From 2013 to 2018, VietABank resolutely implemented the Strategic Project and restructured the bank. In 2023, the bad debt ratio at the bank was controlled at 2.88%.
In the following years, VietABank's business results continuously improved. The bank's profits increased rapidly. Within 10 years, VietABank's profits climbed from a low of VND47 billion in 2014 to VND654 billion in 2021.
In 2022, after the position of Chairman of VietABank's Board of Directors changed, the bank reported a 36.2% increase in after-tax profit over the same period due to effective operations and sale of assets to offset debt, thereby increasing other net interest income by 43.2% over the same period.
In addition, the bank continued to strengthen bad debt handling, so provisioning costs decreased, and provisioning reversal increased, contributing to increased profits.
In 2023, VietABank recorded net interest income of VND 1,809.5 billion, an increase of 21.5% over the previous year. Due to the high credit risk provisioning costs for the whole year at VND 675.3 billion, nearly 11 times higher than in 2022, VietABank reported pre-tax profit of VND 928 billion, and after-tax profit of VND 758.3 billion, respectively, down more than 14% over the previous year.
At the end of the first quarter of 2024, VietABank recorded net interest income of VND 539 billion, an increase of 21% over the same period in 2023. During the period, the bank sharply increased its credit risk provisioning expenses by 5.5 times compared to the same period last year to nearly VND 167 billion. As a result, VietABank reported pre-tax profit of nearly VND 248 billion and after-tax profit of nearly VND 203 billion, down nearly 8% compared to the first quarter of 2023.
Notably, in terms of loan quality, as of March 31, 2024, VietABank's total bad debt was VND1,678 billion, up 52.6% compared to the beginning of the year. Of which, substandard debt (group 3 debt) increased by 35.6% to VND779.4 billion. Doubtful debt (group 4 debt) reached VND24.1 billion, up 10.4%.
Notably, more than 52% of VietABank's bad debt is debt with the potential to lose capital (group 5 debt), accounting for VND875 billion compared to the total outstanding debt. The increase in total bad debt has led to the ratio of domestic bad debt/bank outstanding loans increasing from 1.59% at the beginning of the year to 2.35%.
Looking back at the period from 2020 to the first quarter of 2024, VietABank's bad debt increased from VND 957 billion to VND 1,679 billion. In particular, the bank's group 5 debt also continuously increased from VND 456 billion in 2020 to VND 875 billion in the first quarter of 2024.
In 2024, VietABank plans to operate with pre-tax profit of VND 1,058 billion, while controlling bad debt below 3%. Thus, by the end of the first quarter of 2024, the bank has completed 23.4% of the profit target and bad debt is still controlled according to plan .
Source: https://www.nguoiduatin.vn/hanh-trang-chuyen-nha-cua-540-trieu-co-phieu-vietabank-a665548.html
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