Government proposes VNĐ20.6 trillion boost for Vietcombank to enhance financial capacity
Government proposes VNĐ20.6 trillion boost for Vietcombank to enhance financial capacity
The Government has proposed the National Assembly (NA) to consider pumping an addition of VNĐ20.695 trillion (US$842.8 million) worth of State capital into the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) to improve its financial capacity for expanding international reach and for it to become one of Asia’s 100 largest banks.
A customer completes a transaction at a branch of Vietcombank. — VNA/VNS Photo Trần Việt |
During a discussion at the meeting of the NA Standing Committee on Tuesday, Governor of the State Bank of Việt Nam Nguyễn Thị Hồng said that the capital will be sourced from stock dividends distributed to State shareholders from the accumulated profits as of the end of 2018 and the remaining profits in 2021 of Vietcombank.
Hồng said that increasing State capital for Vietcombank aligns with the banking industry development strategy for 2025, with a vision toward 2030, as well as the 2021-25 credit institution restructuring and bad debt resolution plan.
The capital will help Vietcombank improve its financial capacity to expand international reach and become one of the biggest banks in Asia, while affirming its leading role in the financial and banking sector.
Vietcombank will also have the capacity to implement the Government’s policies and support economic growth such as credit for agriculture and rural development and other preferential interest rate programmes.
The bank will then have adequate resources to support the restricting of weak credit institutions, playing a significant role in ensuring the system safety and contribute to the healthy and stable development of the banking sector and the entire economy, Hồng said. There are concerns that Vietcombank might receive a weak credit rating.
NA Chairman Trần Thanh Mẫn agreed that it is necessary to increase State capital at VCB to enhance its financial capacity, ensure the minimum capital adequacy ratio and promote its role in the banking industry and the economy. Mẫn urged more careful consideration of the impact and efficiency of the capital increase.
