Being many "hot" issues at the general meeting of shareholders of banks

Many banks have announced plans to hold the General Meeting of Shareholders in 2023. Illustration: H.D

This year, the challenging economic context makes shareholders pay attention to dividends and hot issues such as profits, bonds, real estate credit, and bad debt...

According to the document expected to be submitted to the General Meeting of Shareholders, in terms of profits, this year, banks have more modest plans than in previous years.

VIB forecasts that this year's profit will only increase by 15.3%, about VND 12,200 billion, while in 2022, it will grow by 32%. However, although some financial indicators such as total assets, credit balance and capital mobilization have only completed less than 90% of the plan, VIB still aims to grow these targets at a rate above 25% in 2023.

Nam A Commercial Joint Stock Bank (NamABank) also only set a target of consolidated pre-tax profit of VND 2,400 billion, an increase of less than 6% compared to 2022, much lower than the growth rate of 26% last year.

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) aims to increase profits by at least 12%, much lower than the increase of nearly 40% in the previous year. However, Vietcombank also achieved the target of total asset growth of 9% and credit growth of 12.8%, of which the outstanding balance of VND 51,000 billion has not been excluded, which is expected to be sold to a weak credit institution to receive a compulsory transfer during the year.

Although the Export-Import Commercial Joint Stock Bank (Eximbank) set a growth target for this year quite high compared to other banks, with 34.8%, it is still much lower than the results of 2022, with an increase of 207%.

Leaders of many banks said there would be many difficulties in 2023, and monetary policy and banking business activities would face many pressures, so they did not dare to set a growth target as high as 2022. As a result, the growth rate of credit was very low in the first 2 months of 2023, reaching nearly 0.8%, much lower than the same period last year, showing the "unhealthy" situation of businesses because credit was still the main source of income of banks.

Overall assessment of the banking industry's profit outlook this year, the report of VNDirect Securities Company is forecasted to increase only 11% compared to the increase of 34% last year. Vietcombank Securities Company (VCBS) also forecasts that this year's bank profit growth will only reach about 10%, and there is a strong division among banks.

Along with declining profits and credit, declining asset quality, and increasing bad debts, corporate bonds will likely be questioned by bank leaders by shareholders at this year's general meetings.

According to FiinGroup's economic outlook report, the bad debt ratio tends to increase, and at the same time, the potential bad debt risk from the real estate credit portfolio, including loans of real estate investors, loans of homebuyers and cross-bad debts from real estate bonds require banks to increase their "buffer" for risk and profit impact.

In addition, recently, the State Bank said that over the past time, it had unexpectedly inspected the investment activities of corporate bonds of 11 credit institutions. Based on inspection results, the monetary authority had issued several decisions to sanction administrative violations with banks that commit violations.

Along with the above hot issues, this year, shareholders of banks are also "renovated" with the expectation of paying dividends in cash after many years of dividing by shares. For example, VIB plans to pay a cash dividend of 35%, maybe even higher if extraordinary revenues were recognized in 2022; Tien Phong Commercial Joint Stock Bank (TPBank) expects a rate of 25%; ACB with a dividend plan of 10% in cash and 15% in shares; Vietnam Prosperity Commercial Joint Stock Bank (VPBank) also expects to pay a cash dividend from this year at the rate of 30% of annual profit after tax…

According to experts, this year, the State Bank is no longer tightening cash dividends for high-ranked banks, instead encouraging banks to pay dividends in shares to increase charter capital, improve financial capacity and ability to grant credit to the economy and stabilize market interest rates.