HDBank (HSX: HDB) has just announced a decision to increase charter capital to more than VND20.27 trillion ($881.3 million) by paying share dividend for 2020 and issuing shares to employees.
|HDBank announced the distribution of dividend and bonus shares to increase its charter capital |
Information published by the Ho Chi Minh City Stock Exchange shows that the Board of Directors of HDBank has approved the plan to increase charter capital in 2021 in line with the proposal submitted at the bank's annual shareholders' general meeting.
The bank will increase its charter capital by VND3.98 trillion ($173 million) by issuing more than 398 million dividend-paying shares in 2020 at a rate of 25 per cent. The capital source for issuance from undistributed profits has been fully audited and set aside for funds as prescribed.
In addition, HDBank will issue 20 million shares to employees under an employee stock ownership plan (ESOP) at the price of VND10,000 (43.5 US cents) apiece.
Once the above issuance plans are completed, HDBank's charter capital will increase from VND16.08trillion ($699.13 million) to VND20.27 trillion.
Closing the session on June 3, the price of HDB shares reached VND35,800 ($1.56) with an active net buying from foreign investors.
In the first quarter, HDBank posted a pre-tax profit of over VND2.1 trillion ($91.3 million), an increase of 68 per cent on-year thanks to income from services. Return on Equity (ROE) and Return on Assets (ROA) were at 26.3 and 2.1 per cent, a sharp increase against the corresponding period last year. The capital adequacy ratio reached over 12 per cent according to Basel II standards while individual bad debts ratio was below 1.1 per cent.
HDBank has been assessed to have high growth potential in bancassurance, consumer finance, credit cards, as well as other product and service lines. HDBank is one of the few banks that has yet to sign an exclusive cooperation agreement in the life insurance business and as such is being courted by several major partners.
International credit rating agency Moody's Investors Service (Moody's) recently upgraded HDBank's outlook from "stable" to "positive". Moody's assessed that HDBank's Base Credit Rating (BCA) may be adjusted and upgraded in the next 12-18 months thanks to its constant improvements in asset quality and profitability.
|Moody's recently upgraded HDBank's outlook to "positive" over constant improvements in asset quality |