Eximbank fails to pay dividends
Eximbank fails to pay dividends
Shareholders' questions about plunging profits, no dividend payment, a heavy debt burden and large compensations for the board of directors heated up the Viet Nam Export Import Commercial Joint-Stock Bank (Eximbank)'s annual meeting yesterday.
However, at the close of the seven-hour meeting with shareholders holding 91 per cent of shares with voting rights, participants seemed largely unsatisfied with bank leaders' answers.
Eximbank, despite being one of the five largest commercial joint stock banks in the country, posted a very modest pre-tax aggregated profit of VND68 billion (US$3.12 million) last year, falling by 91.5 per cent against 2013 and meeting only 3 per cent of the year's projection.
The bank's general director Pham Huu Phu said that large risk prevention provisions, of VND588 billion ($26.97 million) eat into the bank's profit, which should have been at VND1.9 trillion ($87.15 million) for 2014 alone.
As a result, Eximbank said they would not pay dividends to shareholders this year.
Eximbank chairman Le Hung Dung apologised to shareholders for the bank's bad business results, begging their sympathy. He attributed bad business results to unpredictable market difficulties, especially in property markets.
Shareholders' also voiced questions about capital recoverability of non-performing debts. The bank said that, as of the end of June, its bad debts totaled VND2.4 trillion ($110.09 million), only five per cent of which did not have mortgages.
Regarding the bloated compensations for the board of directors and supervisory board, totalling VND33 billion ($1.5 million), Phu said the sum would be put back into the Eximbank's fund.
Eximbank also refused to disclose results of the State Bank of Viet Nam's inspection of the bank's operation, reasoning that the inspector had yet to announce its findings.
Yesterday's meeting failed to address two issues of great concern amongst shareholders, the bank's personnel and merger plans. The board of directors' term will end this year, which means that another major shareholders' meeting is needed.
The bank's board of directors and the supervisory board for the new term has yet to be approved by the central bank.
Despite the tense discussion session, all documents prepared by the bank's board of directors were approved at the meeting.
In the first half of this year, Eximbank reported a profit of VND570 billion ($26.14 million), 57 per cent of the plan for the full year, and expects to meet this year's plan.
Eximbank's yearly target is to increase total asset by 12 per cent to VND180 trillion ($8.25 billion) and a pre-tax profit of VND1 trillion ($45.87 million).
