HANOI– Vietnam’s major state-owned banks are under pressure for a capital increase in 2023, as their charter capital is too low, with some unable to ensure the regulated minimum capital adequacy ratio (CAR), local media reported, yesterday.
The low CAR will affect the credit supply of the state-owned banks, which will limit their support to businesses, especially when the economy is facing many potential risks, local newspaper, Vietnam News, reported.
Agribank, one of the four biggest state-owned banks in Vietnam, is unable to ensure the minimum CAR, to get higher credit growth, due to the low charter capital, which caused the bank to have a low credit growth in 2022, the newspaper reported, citing its chairman, Pham Duc An, as saying.
Another big four, Vietcombank, plans to issue a maximum of nearly 2.77 billion shares to pay dividends to shareholders, and increase charter capital by approximately 27.7 trillion Vietnamese dong (1.18 billion U.S. dollars), local newspaper, Baodautu (Investment), reported.
If successful, the bank’s charter capital will increase by 58.4 percent, from more than 47.3 trillion Vietnamese dong (two billion dollars), to over 75 trillion Vietnamese dong (3.18 billion dollars), it said.
As of Oct, 2022, the CAR of Vietnam’s state-owned banks was only 9.04 percent, much lower than that of other regional countries, such as the Philippines (16.29 percent), Singapore (17.2 percent), Malaysia (18.3 percent), Thailand (19.3 percent) and Indonesia (23.3 percent).
Moreover, many countries in the region have applied Basel III, or a part of Basel III, while banks in Vietnam have mostly implemented Basel II, the newspaper said.
Source: NAM NEWS NETWORK
