Vietcombank shareholders on Monday approved a lower profit target for the year, cutting the bank's estimated take this year by 10 per cent from earlier forecasts to VND4.5 trillion (US$236.84 million).
"Deposits are expected to grow more quickly than credit this year, but there will be more pressure from deposit interest payments, so we have cut profit estimates by VND420 billion ($22.11 million)," explained Vietcombank General Director Nguyen Phuoc Thanh.
In the first quarter of this year, deposits rose by just 1-2 per cent, while credit grew by 6 per cent. First-quarter profits were estimated at about VND1.4 trillion ($73.68 million).
Vietcombank projects deposits to grow by 23 per cent this year, up from last year's rate of 19.5 per cent, while credit growth is projected to reach 20 per cent, down from last year's 25.9 per cent. Total outstanding loans by the end of the year are projected to hit VND169.94 trillion ($8.94 billion), with bad debts to be kept under 3.5 per cent.
The bank will double its risk provision fund this year to VND1.5 trillion ($78.9 million) and expects total assets by December 31 to grow by 15 per cent over last year to VND293.8 trillion (Nearly $15.5 billion).
The general shareholders meeting also approved a plan to increase charter capital from VND12.1 trillion ($636.84 million) to VND17.58 trillion ($925.63 million).
"The capital increase aims to ensure a capital adequacy ratio of 10 per cent of total capital," Thanh said, explaining that the increase would take place in two phases in the second and fourth quarters, in co-ordination with an offer of additional shares to existing sareholders at a ratio of 33:100. The shares would be priced at VND10,000 per share.
Additional capital would be allocated to strategic investments, infrastructure improvements and increased credit growth, Thanh said.
The State Bank of Viet Nam late last week was appointed the representative of State-owned capital in Vietcombank, replacing the State Capital Investment Coproration (SCIC). Vietcombank remains over 90.7 per cent State-owned.
The State Bank elected Vietcombank chairman Nguyen Hoa Binh, General Director Nguyen Phuoc Thanh and audit committee chairman Pham Huyen Anh to represent State interests on the board of management.