Pham Quang Dung, Deputy Governor of the State Bank of Vietnam: Viet Tong Bank needs to submit a capital increase plan as soon as possible

The deputy governor of the National Bank commented that as a backbone bank, Vietnam Commercial Bank (HM:) has played a good pioneering role and made important contributions to the overall achievements of the banking industry. Pham Quang Dung, Deputy Governor of the State Bank of Vietnam: Vietcombank needs to submit a capital increase plan as soon as possible Minh Nguyet • {Published date} The Deputy Governor of the State Bank of Vietnam assessed that as an important bank, Vietnam Commercial Bank has fully played a pioneering role and provided the bank with made an important contribution to the overall achievements of the industry.

On January 6, 2024, Vietnam Deputy Governor Pham Quang Dung spoke at a meeting to summarize the party’s work and business activities in 2023 and implement the tasks of Vietnam Foreign Trade Joint Stock Commercial Bank (Vietcombank) in 2024. The State Bank of Vietnam (SBV) allocated to Vietcombank this year A series of tasks including the need for the bank to increase its registered capital as soon as possible.

The deputy governor said that 2023 will be a year full of changes and difficulties. Vietnam is a country with a highly open economy that has fully withstood the impact of external geopolitics and internal difficulties, and the domestic growth engine is slowing down. Consumption, investment, and exports all declined.

Specifically, although consumption will increase compared with 2022, it will be much slower than in previous years. Annual imports and exports fell by 6.6%, and exports fell by more than 4%. Real estate is quiet, affecting people’s demand. Businesses have a defensive mentality and reduce leverage.

Under the difficult macro environment and under the correct guidance of the government, the National Bank has simultaneously deployed policies to promote growth. Although the plan has yet to materialize, growth is already positive. Inflation is under control. Interest rates fell by more than 2%.

>> Price situation in December, fourth quarter and 2023

The vice president commented that Vietnam Commercial Bank, as a backbone bank, has played a good pioneering role and made important contributions to the overall achievements of the banking industry. In 2023, the bank’s pre-tax profit will increase by about 10% year-on-year, contributing more than 11.2 trillion VND to the budget – the largest…

Mr. Deng said that it is expected that the world will continue to face many difficulties and challenges brought about by geopolitical conflicts and high interest rates in 2024. Therefore, the deputy governor requested Vietcombank capital representatives and the board of directors to thoroughly understand the direction of the State Bank of Vietnam’s banking industry action plan for 2024 and the monetary authority’s instructions No. 01 and 02, focusing on some major matters.

Bank leadership needs to organize and effectively deploy credit, currency and foreign exchange solutions; formulate a 2024 financial plan, closely follow monetary and credit policies, implement business goals, and strive to reach the end point as soon as possible.

This year, Vietnamese commercial banks have obtained credit lines in advance. Therefore, banks need to take flexible measures to ensure safety and efficiency while making full use of credit growth space, combine bad debt processing with reasonable growth, and ensure a balance between fund mobilization and use. ..

>> Why did the National Bank issue all credit targets at the beginning of the year?

In addition, Vietnamese commercial banks are also responsible for checking and monitoring debt repayment capabilities, mortgage assets, limiting the occurrence of bad debts, and strengthening ties with enterprises. Banks need to implement restructuring plans and development strategies related to bad debt treatment on schedule; improve management and administrative capabilities; strengthen internal inspection and audit work; prevent, combat and prevent illegal activities and violations of internal regulations.

In particular, banks need to carefully prepare the necessary conditions, especially human resources, finance, information technology, regulations and policies, to ensure the smooth implementation of the mandatory transfer plan and force some weak credit institutions in 2024. Mandatory transfer of credit institution licenses to build and develop the Vietcombank ecosystem and develop the number of banking ecosystems.

In addition, the deputy governor emphasized that Vietnamese commercial banks also need to submit plans to increase registered capital as soon as possible to improve financial capabilities, ensure capital adequacy ratios, and increase retained profit capital to more than 28 trillion VND from 2021.

>> 25 banks compete to increase registered capital

The Bank needs to work hard to bring this to the nearest Congress session as soon as possible. In addition, the bank needs to actively formulate a capital increase plan for retained profits in 2022, limit the sources of private equity issuance, and avoid diluting state-owned equity.

In addition, some other tasks that the bank needs to perform in 2024 include improving credit quality and limiting new bad debts; accelerating the recovery process of mortgage assets and increasing off-balance sheet debt recovery; strictly implementing insurance business laws and regulations, expanding channels, and utilizing Partner Ecosystem…

>> Vietcombank reports 2023 earnings, bank transfers weak