Banks raise charter capital for new growth stage

According to banking experts, credit growth in Vietnam has been very fast in recent years, prompting banks to expand their capital scale. Currently, banks still have plenty of room to raise capital and improve capital adequacy ratios (CAR).

As Vietnam’s economy has been on the recovery trajectory post-COVID, individuals and businesses are in dire need of capital support from banks to restore production and business.

Therefore, the increase in charter capital also facilitates banks to improve their financial capacity and diversify products and services to better meet the needs of customers and maintain credit growth of 8-10 per cent per year in the coming time.

The State Bank of Vietnam (SBV) approved the chartered capital increase of the wholly foreign invested CIMB Vietnam Bank from the current VND3.69 trillion ($157.73 million) to VND3.92 trillion ($167.57 million).

Accordingly, the central bank promulgated Decision No.1205/QD-NHNN amending the charter capital of the bank’s license.

In the past three years, CIMB Vietnam has continuously increased its charter capital, showing its commitment to long-term digital banking development in the country.

CIMB Vietnam is a member of CIMB Group – one of the biggest investment banks in Asia. CIMB Bank Vietnam draws on a strong ASEAN base and a commitment to excellence to help its customers build a strong and sustainable financial future.

With innovative products and services, CIMB has made a mark on the market as one of the leading digital banks, growing more than 250 per cent in users since the beginning of 2020.

Meanwhile, Maritime Bank announced its plan to increase its charter capital to VND20 trillion ($854.9 million) through the issuance of bonus shares to existing shareholders at the rate of 30 per cent and the maximum issuance of 14.25 million shares to employees from the owner equity. The plan will be carried out in 2022 after being approved by the regulatory agencies.

In the first half of this year, SeABank issued 211.4 million shares for dividend payments and 109.7 million shares to increase share capital from stakeholders' equity. With these two issuances, SeABank's charter capital increased to $847 billion.

In July, Techcombank also gained approval from SBV to issue 6.3 million shares with a subscription price of VND10,000 ($0.43) per share. After the successful issuance, the bank's charter capital is expected to increase to over VND35.17 trillion ($1.5 billion).

The capitalisation of Vietnam’s banking sector has improved gradually in recent years amid rising profitability and banks’ capital raising efforts.

Fitch estimates that the banks that are still to become Basel II compliant need only about $0.6 billion of new capital to meet the local Basel II minimum CAR requirement of 8 per cent before the implementation deadline in January 2023.