Banks gear up for massive capital increases

HDBank has announced December 19 as the date for shareholders to receive their 2024 dividends in shares, as well as bonus shares.

Banks mulling over massive capital increases

Accordingly, the bank (HDBank) plans to issue nearly 965 million shares to pay stock dividends at 25 per cent, meaning existing shareholders owning 100 shares will receive 25 new shares.

At the same time, the bank also plans to issue more than 181 million bonus shares sourced from its accumulated reserve fund for charter capital supplementation. At a ratio of 4.69 per cent for every 100 shares held, shareholders will receive 4.69 bonus shares.

This ratio has been adjusted from an earlier plan, under which HDBank intended to issue up to nearly 193 million bonus shares at a 5 per cent rate.

After the issuance, the bank’s charter capital is expected to surge from approximately $1.54 billion to around $2 billion.

The fourth quarter (Q4) of 2025 is set to witness a wave of banks submit plans or await regulatory approval to embrace capital increases.

SHB is leading the pack with a plan to add approximately $300 million, lifting its charter capital to about $2.14 billion through the issuance of 750 million shares.

Saigonbank will raise its charter capital to around $144.3 million after issuing more than 22 million shares.

ABBank has been approved by the State Bank of Vietnam to increase its capital by about $144 million, bringing charter capital to roughly $560 million.

NCB has completed a private placement to 17 investors, $300 million and reaching its restructuring target ahead of schedule.

OCB and Nam A Bank are also actively extending their capital increase plans through share issuances.

Along with capital increases, bank bonds continue to dominate the market. In the first nine months of the year, banks issued more than VND306,500 billion (approximately $12.26 billion), accounting for 71 per cent of the total corporate bond market.

According to statistics, the combined charter capital of 28 banks came to around $37.04 billion by November, up nearly 16 per cent from the end of 2024.

The race to raise capital is expected to intensify further, as this is considered a critical, even vital, objective to ensure safety and enable expansion.

Among the four major state-owned banks, VietinBank has announced it will finalise its shareholder list on December 18 to issue nearly 2.4 billion shares to pay stock dividends at a ratio of 44.64 per cent.

This is the largest stock dividend issuance in the banking sector in 2025. Following the issuance, VietinBank’s charter capital is expected to increase from about $2.15 billion to close to $3.1 billion.

Vietcombank and BIDV are also expected to take similar steps soon, as several of their proposed capital increase plans have yet to be completed.

The government issued Resolution No.273/NQ-CP on September 9, instructing the State Bank of Vietnam to accelerate charter capital increases at state-owned commercial banks.

In March, the Vietcombank board approved a 2023 profit distribution plan that after setting aside reserves, the entire remaining profit of approximately $910.8 million would be paid as stock dividends.

The bank has also allocated around $867.2 million in retained earnings from 2022 to pay stock dividends.

If approved, Vietcombank is expected to soon issue new shares and lift its charter capital beyond the VND100 trillion ($4 billion) billion mark.

At BIDV, the bank’s 2025 AGM approved a plan to increase charter capital by approximately $866.2 million to around $3.67 billion, representing a 30.8 per cent increase.

The bank plans to issue more than 498.5 million bonus shares, equivalent to 7.1 per cent of outstanding shares, and nearly 1.397 billion shares to pay dividends from undistributed accumulated profits for 2023.

Dragon Capital increases stake in Sacombank Dragon Capital, a prominent investment group, has bolstered its position in Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) by acquiring an additional 3.5 million shares on October 19.

Banks get go-ahead for capital increases Many banks in Vietnam have received approval for substantial capital hikes, signalling a strategic effort to fortify the financial sector and enhance several essential ratios.

Strict management needed for bank capital increases Capital increases at banks may pose risks of manipulation and cross-ownership among closely related companies if management is lax.