Banks prohibited from paying dividends in cash in 2022
Banks prohibited from paying dividends in cash in 2022
Vietnam's commercial banks will be barred from paying cash dividends to shareholders to reduce interest rates.
Additionally, in the preceding year 2021, the State Bank of Vietnam (SBV) instructed banks to refrain from paying cash dividends in order to spend resources on lowering interest rates for individuals and companies. Thus, banks will be prohibited from paying cash dividends to shareholders for the second consecutive year in 2022.
In 2021, just three state-owned banks paid cash dividends, namely Vietcombank, VietinBank, and BIDV.
In which, Vietcombank paid a cash dividend of 12 per cent, BIDV 2 per cent, and VietinBank 8 per cent.
As a result, the aforementioned cash dividends at all three banks are subtracted from the retained undistributed after-tax earnings from 2020, while the profit in 2021 has been authorised by shareholders to retain all of them for future uses in a bid to assist banks’ growth.
Besides this, the SBV also compels commercial banks to carefully adhere to directives of management agencies on currency, foreign exchange, and banking operations. Regular inspection and supervision of the compliance status are essential in order to quickly resolve infractions.
