Banks spend big on cash dividend payments

Banks spend big on cash dividend payments

The move is not only a reward for the shareholders' support, but also a strong confirmation of the banks' financial capacity and abundant cash flow.

MB is among the banks with a high dividend payout rate. — VNA/VNS Photo

After years of accumulation and cash payment restrictions to focus resources on supporting its operation, the Vietnamese banking system is entering a new phase, with unprecedented large dividend payments for shareholders.

The move is not only a reward for the shareholders' support, but also a strong confirmation of the banks' financial capacity and abundant cash flow.

Military Bank (MB) announced that July 10 this year is the record date for shareholders to receive cash dividends for 2025 at a rate of 10 per cent. The payment date is July 17. With over 8.05 billion shares outstanding, MB will spend approximately VNĐ8.05 trillion (US$306 million) on this cash dividend payment.

Part of a profit distribution plan approved by the MB shareholders' meeting, dividend payments in shares will increase the firm's charter capital by approximately VNĐ12.08 trillion.

LPBank also previously announced to distribute cash dividends at a rate of 30 per cent. With over 2.9 billion shares listed, LPBank will spend an estimated VNĐ8.96 trillion to pay dividends to existing shareholders.

Meanwhile, Techcombank plans to spend over VNĐ4.96 trillion to pay cash dividends for 2025 at a rate of 7 per cent. This is the third consecutive year Techcombank has implemented this policy, marking a complete shift from its decade-long strategy of retaining all profits.

In June, VIB also completed the payment of a 9 per cent cash dividend. With over 3.4 billion shares outstanding, the total amount paid to shareholders by VIB reached VNĐ3.06 trillion. At the same time, the bank also implemented a 9.5 per cent bonus share plan and increased its charter capital to a maximum of VNĐ37.35 trillion through bonus share issuances and an ESOP programme for employees.

At ACB, shareholders earned a total dividend of 20 per cent. Of this, the cash dividend payment accounted for 7 per cent, equivalent to nearly VNĐ3.6 trillion, while the remaining 13 per cent was distributed as bonus shares.

Aside from those banks that have completed or are in the process of distributing dividends, the list of banks preparing to distribute cash dividends continues to grow, with names like SHB and VPBank at the top.

Specifically, SHB plans to spend over VNĐ3.2 trillion to pay cash dividends at a rate of 6 per cent. This is part of its overall 16 per cent dividend distribution plan for 2025, with a total capital expenditure of up to VNĐ8.55 trillion.

Meanwhile, VPBank also plans to allocate approximately VNĐ4 trillion to pay cash dividends at a rate of 5 per cent. This expenditure is part of its 2025 profit distribution plan, with a total dividend rate of up to 31 per cent.

The mass cash dividend payments by banks reflect a strong trend in the banking system, signalling institutions' confidence in their cash flow stability.

Statistics show that this trend is increasing year by year. While only six banks paid approximately VNĐ23 trillion in cash dividends in 2023, this number increased to nine banks in 2024 with VNĐ30 trillion in payments.

For 2025, up to 12 banks are expected to distribute cash dividends with a total estimated amount of VNĐ42.6 trillion. This increase shows that the restrictions on distributing profits have gradually been lifted, allowing financially sound banks to share their gains with investors.

To be able to spend trillions of Vietnamese đồng in cash, banks must rely on an extremely impressive profit base in the first quarter of 2026.

Although receiving cash dividends likely brings excitement to shareholders, financial and banking expert Dr Nguyễn Trí Hiếu said this is an issue that needs to be viewed from multiple angles.

Hiếu said on the positive side, regularly paying cash dividends helps banks signal their financial stability and enhance their reputation and trust with investors. Banks that maintain this policy often attract investors seeking safety and sustainable passive income.

However, he noted, paying out too much cash can also create certain pressures. This could reduce the amount of capital available for banks to reinvest in technology projects, expand their network or increase their competitiveness. If a company focuses too much on shareholders' short-term expectations, it may inadvertently hinder its own long-term growth.

Regulations such as Circular 14/2025/TT-NHNN have therefore set strict technical barriers. Banks are only allowed to distribute cash dividends when they ensure capital buffers, core capital ratios and capital adequacy ratios exceed the prescribed thresholds. This means that only truly healthy banks with good risk management capabilities can participate in this cash dividend distribution.

Combining cash and stock dividends, as MB, VIB and ACB are doing, is seen as a harmonious solution to both satisfy shareholders and strengthen financial buffers for further progress in the future. 

Bizhub