Techcombank, owned by billionaire Ho Hung Anh, has released documents for the 2022 annual general meeting of shareholders. One thing that hasn’t changed in the last decade: profits will be retained to supplement capital. 

As of the end of 2021, Techcombank’s total cumulative distributable profits had reached VND40.1 trillion as the bank has not paid dividends in cash for the last 11 years.

The bank only pays dividends in shares. Most recently, in 2018, Techcombank issued bonus shares with the issuance of 200 percent, which means that shareholders could get two bonus shares for every share they held.

The latest stock split has helped Techcombank’s charter capital increase by three times. Its share prices have decreased by three times. This, plus good business performance, has caused the share market prices to increase rapidly, thus making the capitalization value increase to VND180 trillion.

In previous years, some Techcombank shareholders were not happy because the bank did not pay dividends in cash. However, many others agreed with the business strategy followed by the managers, which helped expand the operation and share prices to increase sharply.

Other banks have also reported fat profits and the decision not to  pay dividends in cash.

Meanwhile, the State Bank of Vietnam has asked commercial banks to reduce profit target and not  pay dividends in cash, so that they can lower lending interest rates. This is the second consecutive year that the central banks has issued such a direction.

ACB Bank plans to submit to shareholders a plan on issuing 675 million shares to pay dividends this year, which would raise the charter capital from VND27.019 trillion to VND33.7 trillion.

OCB is planning to pay dividends in shares with the ratio of 20-25 percent, while Maritime Bank will have 30 percent, and Sai Gon Ha Noi will consult with shareholders about a plan to pay dividends in stocks with the minimum ratio of 15 percent.

In general, most banks strive for profit increases when designing business plans in 2022, while their capital will increase after the issuance of stocks to pay dividends to investors, and cash will be retained for banks to expand investment and increase credit. 

Techcombank has not paid dividends in cash over the last 10 years, but the bank has continuously issued ESOP shares at low prices to its workers. 

In a statement to the 2022 general meeting of shareholders, the bank’s board of management proposed issuing 6.3 million ESOP at VND10,000 per share, which is just one-fifth of the current market price.

M. Ha