No longer being "squeezed", banks are generous in paying cash dividends

Banks are aggressive in paying cash dividends after many years of suspension.

After many years of “waiting,” shareholders of some banks will receive cash dividends this year. This is also a memorable dividend season for many banks when the form of cash dividends is re-implemented after many years of suspension.

Through the time of "fasting" cash dividends

Unlike 3 years ago, when the COVID-19 pandemic was raging, the State Bank always required banks to pay dividends in shares to increase capital and reserve resources to handle bad debts, this year there is no longer a "tightening" on cash dividends for highly rated banks.

Instead, the management agency only encourages banks to pay dividends in shares to increase capital, improve financial capacity and ability to provide credit to the economy, stabilize market interest rates... This is a condition for banks to implement plans to pay dividends in cash after many years of paying dividends in shares.

Therefore, after being "paved the way", a series of banks have planned to pay dividends in cash instead of just stocks like previous years.

TPBank's Board of Directors has just announced that on March 21, 2023, the bank will close the list of shareholders receiving cash dividends at a rate of 25%. The payment date is April 3, 2023, the source of capital for payment is taken from undistributed profits, after setting aside funds according to the audited financial report for 2021 (more than VND 5,486 billion). With about 1.58 billion outstanding shares, it is estimated that this bank will spend VND 3,955 billion to pay dividends. Up to this point, TPBank is considered to be the bank with the highest cash dividend rate.

Together with TPBank, VIB's Board of Directors also decided to pay dividends in 2022 at a rate of more than 35%, including cash and shares, with a total value of more than VND 2,107.6 billion, equivalent to 10% of charter capital. The source of capital used to pay dividends is undistributed profits as of September 30, 2022, of which retained profits from previous years are not used yet, VND 565 billion and accumulated net profit in the first 3 quarters of 2022 is more than VND 1,542 billion. In 2022, VIB recorded pre-tax profit of more than VND 10,580 billion, an increase of 32% compared to 2021.

VIB leaders said that for the past 3 consecutive years, at the request of the State Bank, VIB has not paid cash dividends, only dividends in shares. Therefore, paying cash dividends in 2023 will meet the legitimate needs and aspirations of the bank's shareholders.

Similarly, ACB plans to pay dividends in 2022 at the same rate as in 2021, which is 25%, of which 10% is expected to be paid in cash and 15% in shares. In 2022, ACB will achieve consolidated pre-tax profit of VND17,114 billion, up more than 40% compared to 2021.

Thus, after 7 years, ACB shareholders will have the opportunity to receive cash dividends. The last time ACB paid cash dividends was in 2015 at a rate of 7%.

At VPBank, at the end of the 2022 shareholders' meeting, VPBank Chairman Ngo Chi Dung also surprised the shareholders who stayed until the last minute by announcing a plan to pay cash dividends. Mr. Dung said that with the capital foundation achieved by the end of this year, not only is it sufficient to ensure high growth according to the plan for the next 5 years, but the Board of Directors also plans to submit to the Shareholders' Meeting next year a cash dividend of up to 30% of annual after-tax profit.

If approved by the State Bank, this will be the first time VPBank has paid mass cash dividends to existing shareholders since its listing in 2017. Previously, the bank had only paid cash dividends for more than 73 million preferred shares in 2018 at a rate of 20%.

As an investor who has held many bank stocks since the beginning of 2022, Mr. Nguyen Trong Toan (Cau Giay, Hanoi) said that the stock prices of this industry have decreased sharply, so he is looking forward to cash dividends.

The State Bank has tightened the form of cash dividends since 2020 to reserve resources to handle bad debts, VAMC bonds and strive to continue reducing lending interest rates to support people and businesses. The only exception to cash dividend payments is for state-owned banks (Vietcombank, BIDV, VietinBank) due to the request from the State Treasury.

There are still shareholders who only dream of owning shares.

However, in addition to paying cash dividends, many banks also plan to pay stock dividends to increase their charter capital. For example, the Board of Directors of Eximbank has just announced the closing of the list of shareholders who can exercise their right to receive stock dividends. This is the first time in nearly 10 years that this bank has paid dividends to shareholders.

Accordingly, Eximbank shareholders will receive stock dividends at a rate of 20%, meaning that shareholders owning 100 shares on the record date will receive 20 new shares. Previously, the State Bank approved Eximbank to increase its charter capital by a maximum of VND2,459 billion from undistributed profits according to the charter capital increase plan approved by Eximbank's General Meeting of Shareholders.

Many banks have planned to pay high dividends. Illustrative photo

With more than 1,229 billion shares in circulation, Eximbank plans to issue a maximum of nearly 245.9 million shares to pay dividends. The capital for issuance comes from after-tax profits, after setting aside funds in 2017, 2018, 2019, 2020 and 2021. At the 2021 annual general meeting, former Chairman of the Board of Directors of Eximbank, Mr. Yasuhiro Saitoh, informed that in 2022, Eximbank had satisfied the final condition to pay dividends after fully paying off all VAMC bonds. After this 20% stock dividend in 2023, Eximbank's charter capital will increase to VND 14,814 billion.

Dividends are also a topic that is often mentioned at each shareholder meeting of Sacombank. The bank's leaders have repeatedly said that they will continue to present plans to use retained earnings to pay dividends to shareholders, but dividend payments at a bank undergoing restructuring need to be approved by the State Bank.

Sacombank's leaders said that by 2023 at the latest, all outstanding issues under the restructuring project will be resolved, thereby officially completing the project ahead of schedule as approved by the State Bank. On that basis, Sacombank will carry out procedures to request permission from the State Bank to pay dividends to shareholders.

In fact, in recent years, Sacombank has implemented a restructuring project after merging with Southern Bank, so it has not been allowed to pay dividends. The bank's most recent dividend payment was in 2015 at a rate of 20% in shares.

Mr. Nguyen Van Ha (Thu Duc District, Ho Chi Minh City), a loyal shareholder of Sacombank since 2019, said: "The biggest dream of shareholders is to receive dividends, but according to the 5-year restructuring project, this "journey" is about to end. If we receive dividends early, we will be very happy."

Meanwhile, a Techcombank shareholder said he had not been invited to the General Meeting of Shareholders, so he did not know whether he would receive dividends or not. However, this shareholder hoped to receive dividends this year because the bank had not paid cash dividends for 11 years and had not paid dividends for 4 consecutive years.

“Over the years, whether the bank is strong or weak, I have been with it, but for many years I have not received any dividends, while many other banks have distributed at high levels,” said the above Techcombank shareholder.

At the 2022 general meeting of shareholders, many bank leaders had a headache with questions from shareholders regarding why high profits still do not pay dividends to shareholders. Hopefully this year's general meeting will satisfy many shareholders' expectations.

According to Vietnam+