Bao Viet unveils restructuring plan at AGM 2023

July 04, 2023 | 12:26
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Bao Viet Group outlined its strategic divestment plans and ambitious financial targets at its AGM 2023 in late June.
Bao Viet unveils restructuring plan at AGM 2023

Bao Viet Group, listed on the Ho Chi Minh Stock Exchange under the ticker BVH, has conducted its AGM for 2023, during which it presented key elements of its strategic plans for the 2021-2030 period and the restructuring roadmap for 2021-2025.

The development strategy for 2021-2025 sets ambitious targets, aiming to achieve total assets of approximately $10-10.4 billion by the end of 2025. Bao Viet Life Insurance Company, Bao Viet Insurance Corporation, and Bao Viet Fund Management Company have been identified as the core entities crucial to realising this vision.

Anticipated annual growth rates of 10-11 per cent are projected for total assets during the 2021-2025 period.

Likewise, the group's consolidated total revenue is estimated to rise to approximately $3.2-3.4 billion by 2025, exhibiting average annual growth rates of 10-11 per cent over the same timeframe. Consolidated net profit after tax is forecast to reach approximately $79-83 million, demonstrating an average annual growth rate of 4-5 per cent from 2021 to 2025.

Capital mobilisation is emphasised as a critical aspect of achieving these strategic goals. Bao Viet Group plans to maintain state ownership in the parent company during the 2021-2025 period while increasing registered capital through the issuance of shares to existing shareholders from available capital sources, such as excess share capital and the development investment fund.

Looking ahead to the 2026-2030 period, Bao Viet intends to further enhance registered capital while reducing state ownership to maintain a controlling stake of over 51 per cent in the parent company.

Between 2023 and 2025, Bao Viet will carefully study and develop a plan to reduce the ownership ratio in the parent company and transform its two insurance subsidiaries, Bao Viet Insurance Corporation and Bao Viet Life Insurance Company, into joint-stock companies.

The group's leadership emphasised, "The conversion of Bao Viet Insurance Corporation and Bao Viet Life Insurance Company during the 2023-2025 period is a key measure to mobilise resources and meet the capital requirements for insurance business operations."

The group's leaders acknowledged that the initial public offering process may be subject to extended timelines due to regulatory considerations. Similarly, the timeframe for increasing registered capital is currently under careful examination, and various options will be presented to shareholders for approval at the AGM.

For the financial year 2022, Bao Viet Group set an ambitious revenue target of approximately $66 million for the parent company, with a net profit after tax target of around $46 million.

During the meeting, Nguyen Dinh An, a member of the Board of Directors, revealed that the parent company had achieved an estimated revenue of around $32.6 million for the first six months, fulfilling 49.5 per cent of the set target. The estimated net profit after tax for the same period was approximately $22.9 million, representing half of the annual target.

Subsidiaries' revenues for the first half of the year were in line with expectations, reaching approximately half of the set plan. The life insurance segment achieved 50 per cent of the targeted profit performance.

Notably, subsidiary units, such as the fund management company (58 per cent), BVInvest (72 per cent), and BVSC Securities (49.2 per cent), all achieved or exceeded their respective profit targets.

In 2022, Bao Viet Group's consolidated total revenue reached around $2.27 billion, reflecting an 8.2 per cent growth compared to the previous year. The consolidated net profit before tax and after tax met the set targets, amounting to approximately $84 million and $67.8 million respectively.

The parent company's total revenue exceeded the annual plan by 2.3 per cent, reaching approximately $65.2 million, with a growth rate of 5 per cent compared to 2021. The net profit after tax surpassed the annual target by 1.5 per cent, amounting to around $44.4 million and demonstrating a growth rate of 3.4 per cent. The return on equity after tax was reported at 14.4 per cent.

Based on these achievements, the group has made allocations, including a development investment fund of around $13.3 million, a reward and welfare fund for employees worth approximately $1.54 million, and a bonus fund for management personnel amounting to $25,400. The proposed dividend payout for 2022 stands at 9.54 per cent, equivalent to approximately $29.5 million, and will be distributed entirely in cash. The proposed profit distribution plan has received strong approval from shareholders.

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By Tri Lam

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