VPBank can take over a weak bank

This year’s annual meeting of Vietnam Prosperity Bank (VPBank) attracted the attention of a large number of shareholders (many times more than every year), when the bank announced a series of plans, from a huge capital increase, profits topped the private banking sector, to the news of the takeover of a weak credit institution.

Responding to shareholders’ questions about the possibility of participating in the restructuring, Mr. Ngo Chi Dung, Chairman of VPBank’s Board of Directors, said that the bank is studying the transfer of a weak credit institution. However, the bank has not disclosed detailed information and has not submitted a report to shareholders in the meeting on the afternoon of April 29. “Participating in the compulsory restructuring of credit institutions, if any, will also have certain effects, but it is too early to confirm that,” Dung said.

Before, Vietcombank and MB submitted to shareholders for approval the plan to accept the compulsory transfer of one credit institution among the four weak banks subject to restructuring, including Dong A Bank (DongABank) and three compulsory purchase banks, namely Construction (DongABank). CB), Ocean (Oceanbank), Global Petroleum (GPBank).

In addition to this content, VPBank’s capital increase plan and business plan are also the focus of attention.

This year, VPBank sets a target of double the previous year’s profit before tax to nearly 30,000 billion VND, this figure is currently the highest profit in the group of private banks, and only after Vietcombank.

The basis of this plan is the expected credit growth of 35%, depending on the approval of the State Bank, with outstanding loans increasing from 384 trillion dong to 518,400 billion dong. Total bank assets by the end of this year are targeted to increase by 27.4%, capital mobilization by 27.8%.

Responding to the question about the target of a sharp increase in profit, Mr. Nguyen Duc Vinh, CEO of VPBank, said that doubling the number is ambitious, but the bank has a specific strategy, orients growth drivers and is confident in its growth. plan. “In the first quarter, VPBank had an unusual income from insurance cooperation, but even after deducting these amounts, the business results were still achieved based on the established foundation,” said Vinh.

A question that banks have all received in recent annual meetings is the effect of tightening capital flows for real estate, VPBank CEO said that lending in this field accounts for less than 10% of outstanding loans. Meanwhile, loans to real estate buyers for residential purposes account for about 40%. “People’s need to buy houses to live in is a legitimate need and is not restricted, which is also a worldwide trend. As for resort and speculative real estate lending, it will be noticed and tightly controlled.” Mr. Vinh commented.

VPBank also plans to continue to increase its charter capital to become the bank with the largest capital scale in the system. Accordingly, this bank will increase its capital through two phases, increasing its scale from 45,056 billion VND to 79,334 billion VND.

In which, the bank plans to issue shares at the rate of 50% from sources such as undivided profits, reserve fund to supplement charter capital, in the second or third quarter. After that, the bank will privately issue a maximum of 15% of charter capital to foreign investors, bringing the total foreign ownership ratio to a maximum of 30%.

The bank also presented a plan to issue shares under the employee selection program (ESOP) with a volume of 30 million shares. This number will be restricted from being transferred for three years, with annual release rates of 30%, 35% and 35% respectively.

The collected capital is expected to be used to increase financial capacity, expand business activities, contribute capital, buy shares, and cooperate with other credit institutions and subsidiaries.

Another content presented at today’s meeting was VPBank’s acquisition of OPES Insurance Company, with charter capital of VND 550 billion.

Accordingly, VPBank will buy 100% or most (expectedly over 90%) at a price not exceeding 1.5 times the book value of the company. According to VPBank CEO, this deal will not conflict with the existing insurance contract with AIA because OPES is a non-life product.

Regarding the necessity of the deal, according to Mr. Vinh, because OPES is a company developing digital products, if only cooperation, there is no close relationship. According to the plan, VPBank will gradually increase its ownership rate to 100%, making OPES a subsidiary of the bank.

Minh Son