According to Deputy Prime Minister and Minister of Finance Ho Duc Phoc, the additional investment of state capital in the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) aims to meet the minimum capital safety ratios as prescribed; helping VCB have the potential to implement the State's policies and support the economy...
Next program At the 8th session of the 15th National Assembly, Deputy Prime Minister Ho Duc Phoc, authorized by the Prime Minister, presented a report on the policy of additional state capital investment at the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB).
Additional capital needed
Presenting the Summary Report on additional state capital investment at Vietcombank through stock dividends, Deputy Prime Minister and Minister of Finance Ho Duc Phoc emphasized that additional state capital investment at VCB from the remaining profits in 2021 is very necessary to realize the policies of the Party and the National Assembly on improving the efficiency and competitiveness of state-owned enterprises to play a leading and pivotal role in a number of important fields, contributing to promoting the socio-economy and the process of industrialization and modernization of the country.
Besides, the additional investment of state capital at VCB is also in line with Banking industry development strategy By 2025, with a vision to 2030, the Project on restructuring the system of credit institutions associated with bad debt settlement in the 2021-2025 period and the leading role in the banking and finance sector according to the orientation of the Party and Government.
The additional investment of state capital at VCB also aims to create conditions for VCB to meet the minimum capital safety ratios according to current regulations; at the same time, it helps VCB have the potential to continue to promote in implementing the State's policies and supporting the economy.
The additional investment in charter capital will help VCB improve its financial capacity to strive to reach the region and be in the top 100 largest banks in Asia (in terms of total assets) according to the goal of the Banking Industry Development Strategy to 2025, with a vision to 2030. In addition, the investment of state capital in VCB brings efficiency to the state through the implementation of obligations to the state budget. |
In addition, the additional investment of state capital is the basis for VCB to improve its financial capacity, have resources to provide credit for many important national projects with particularly large capital needs. This is also a necessary condition for VCB to have enough resources to support the restructuring of weak credit institutions assigned by the Government and the State Bank, ensuring the safety of the system, contributing to the healthy and stable development of the banking sector and the economy...
Deputy Prime Minister and Minister of Finance Ho Duc Phoc also reported to the National Assembly on the plan to invest additional state capital in VCB, the financial situation, business results of VCB, the current status of equity capital and equity capital needs of VCB, VCB's capital increase plan and additional investment sources of the State. Accordingly, from the urgent need for equity capital mentioned above, VCB has studied sources of additional equity capital such as issuing shares to individual investors, issuing bonds and issuing shares to pay dividends.
However, in the current context, issuing shares to individual investors and issuing bonds to increase capital is not feasible. Therefore, at this time, VCB proposes to allow the use of remaining profits after tax and provision to increase charter capital through the form of paying dividends in shares.
Regarding the additional state capital invested in VCB, VCB proposed to increase its charter capital from the remaining accumulated profit up to the end of 2018 and the remaining profit in 2021 by VND 27,666 billion to ensure a rounding ratio of 49.5%, of which the additional capital of the State shareholder is VND 20,695 billion (rounded). This figure has been confirmed by the auditors who audited VCB's 2023 Financial Statements.
“Therefore, the Government agreed that the additional state capital invested at VCB is VND20,695 billion (the absolute detailed number is VND20,695,100,980,000). The remaining profit of VND36 billion is retained at VCB (similar to the remaining accumulated profit up to the end of 2018) so that VCB can continue to carry out dividend payment procedures to increase charter capital along with the remaining profit of the following years. The retention of VND36 billion is in accordance with the provisions of Clause 1, Article 13 and Clause 1, Article 35 of the State Budget Law and current legal provisions," Deputy Prime Minister and Minister of Finance Ho Duc Phoc stated.
Regarding the plan to use the increased charter capital, Deputy Prime Minister and Minister of Finance Ho Duc Phoc said that the entire additional charter capital will continue to be used as capital for VCB's business operations, investment, development and digital transformation; towards the common goal of improving financial capacity, striving to ensure the capital safety ratio CAR according to Basel III; expanding the scale of operations, modernizing the bank; completing the goals according to the Banking Industry Development Strategy to 2025, with a vision to 2030 and the Project "Restructuring the system of credit institutions associated with bad debt settlement in the period 2021-2025"; implementing the policies of the Party, State and Government in supporting the economy and businesses.
Deputy Prime Minister and Minister of Finance Ho Duc Phoc stated that, based on the above contents and Law 69/2014/QH13 of the National Assembly, the Government respectfully requests the National Assembly Standing Committee to consider and submit to the National Assembly for decision on the policy of additional investment of state capital at VCB and include it in the Joint Resolution of the 8th Session of the 15th National Assembly regarding the following contents: Approval of the policy of additional state capital investment to maintain the state capital contribution ratio at VCB with the amount of VND 20,695 billion from stock dividends distributed to state shareholders from the remaining accumulated profit up to the end of 2018 and the remaining profit in 2021 of VCB.
Agree with the policy of adding more capital
Presenting the Inspection Report, Chairman of the National Assembly's Economic Committee Vu Hong Thanh said that the Economic Committee agreed with the necessity of additional investment of state capital at VCB for the reasons stated above.
Mr. Vu Hong Thanh said that VCB is one of the large-scale commercial banks with more than 50% of charter capital held by the State, prestigious, pioneering in implementing State policies, effectively contributing to the State budget and the socio-economic development of the country.
The additional investment of state capital at VCB will help this bank improve its financial capacity, ensure safety ratios and move towards international standards under the Basel III Agreement, enhance its ability to withstand risks in the context of global economic fluctuations and potential financial risks; expand credit activities, including important national projects with large capital needs; continue to promote the leading role in implementing State policies, supporting socio-economic development and enhancing competitiveness, increasing domestic and international prestige, reaching regional level according to the goals set out in the Banking Industry Development Strategy to 2025, with a vision to 2030.
At the same time, there are enough resources to participate in supporting the restructuring of weak credit institutions according to the Project on restructuring the system of credit institutions associated with handling bad debts in the period of 2021-2025, ensuring the safety of the system of credit institutions, specifically receiving the compulsory transfer of 1 weak commercial bank in October 2024.
Also according to Mr. Vu Hong Thanh, the majority of opinions in the Economic Committee proposed to clarify the structure of using additional invested capital at VCB on the basis of ensuring suitability and consistency with the purpose of additional investment of state capital, in which the focus is on expanding business activities, providing credit for priority sectors and fields, large-scale national important projects, implementing policies of the Government and the State Bank in the direction of reducing the mobilization interest rate level, lending interest rate, supporting enterprises, households and individuals in production and business, contributing to promoting economic development; at the same time, continuing to innovate modern governance models, investing in digital technology, improving technical infrastructure, enhancing service quality to meet the increasing needs of customers.
The National Assembly's Economic Committee also proposed that, in case the National Assembly approves the policy of additional state capital investment at VCB, the Government and the State Bank must ensure that the additional state capital investment at VCB is within their authority, promptly carry out procedures in accordance with the provisions of law, and use capital effectively; at the same time, direct VCB to continue implementing active solutions to ensure the capital safety ratio and the bank's development strategy, truly playing a pioneering role, leading the banking industry and providing capital for the economy, especially in the coming period when Vietnam is focusing resources on developing strategic infrastructure and high-tech industries. |
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