Hiking charter capital just the ticket for banks

Leading banks such as Agribank, Vietinbank, ACB and Sacombank all have plans to raise their chartered capital in 2011.

For example, Agribank is set to add VND10 trillion ($483 million) more to its chartered capital to reach a total VND31 trillion, while Sacombank will hike its chartered capital from current over VND9 trillion to VND10.7 trillion.

Smaller banks are in the same position. “DongA Bank will hike its chartered capital to VND6 trillion ($289.8 million) within 2011 from current VND4.5 trillion to ameliorate competitive advantages,” said the bank’s general director Tran Phuong Binh.

TrustBank chairman Hoang Van Toan said the bank attempted to raise its chartered capital to VND5 trillion from VND3 trillion to enhance financial capacity and sharpen competitiveness amid greater market access to wholly foreign owned banks.

“The move is necessary in current market state,” Toan said.

OCB’s general director Trinh Van Tuan said the bank was awaiting Vietnamese government approval to sell 20 per cent chartered capital to foreign strategic partner France-based BNP Paribas after hiking its chartered capital to VND3 trillion from current more than VND2.6 trillion.

OceanBank chairman Ha Van Tham said the bank would see its chartered capital be added with VND1.5 trillion ($72.4 million) to reach VND5 trillion within 2011.

“With the new chartered capital OceanBank is set to rake in pre-tax profits of VND800 billion in 2011 against 2010’s $690 billion and pay shareholders around 12 per cent dividend,” Tham said.

In December, 2010 banking authorities extended banks’ chartered capital raising deadline by one more year to late 2011. However, most small banks had reportedly reached the benchmark VND3 trillion ($144.9 million) in chartered capital except some banks such as Gia Dinh Bank and Ficombank.