Cash dividends from banks boost investor interest

HÀ NỘI — News of many banks planning to pay dividends, especially cash dividends, have attracted attention from investors in the first month of the New year.

Techcombank proposed an annual cash dividend payment of at least 20 per cent of total profit, equivalent to 4-5 per cent of the bank’s equity at the beginning of the year, an estimated VNĐ1,500 a share for 2024.

Techcombank performed strongly in the last quarter of 2023 and delivered on all components of our full-year financial guidance, said Jens Lottner, Techcombank CEO.

“I am confident that our transformation strategy and established market-leading digital capabilities mean that Techcombank is well-placed for the future. We will submit to the upcoming AGM the proposal for a cash dividend policy, as a part of our continued long-term value creation for shareholders,” he added. 

In 2023, Techcombank’s profit before tax reached VNĐ22.9 trillion (US$930.3 million), exceeding the plan of VNĐ22 trillion approved by the General Meeting of Shareholders in April 2023.

Previously, Vietnam International Commercial Joint Stock Bank (VIB) was the first bank to announce cash dividends this year. 

VIB has decided to spend more than VNĐ1.5 trillion to advance the cash dividends in 2023 for existing shareholders at a rate of 6 per cent. Accordingly, shareholders who own 1 share will receive VNĐ600. The expected dividend payment time is February 21, 2024.

The bank’s leaders at the 2023 Annual General Meeting of Shareholders said that if there are no restrictions from competent authorities, VIB expects to be able to pay dividends of over 30 per cent of the profit after tax achieved in 2023.

According to the financial model and feasibility forecast, VIB is expected to achieve profit after tax of VNĐ8.64 trillion last year, while its undistributed profits as of December 31, 2023 are expected to reach nearly VNĐ9.2 trillion.

Last year, VIB had two dividend payments in March and May with dividend rates of 10 per cent and 5 per cent, respectively. It also paid stock dividends to increase charter capital at a rate of 20 per cent.

The bank issued an additional 7.6 million ESOP shares to employees in June 2023. VIB’s charter capital accordingly increased to nearly VNĐ25.4 trillion.

Similarly, Ngô Chí Dũng, Chairman of the Board of Directors of VPBank, said at the 2023 annual general meeting of shareholders that with VPBank’s potential, the bank will pay cash dividends for five consecutive years and be allowed to pay at the rate of 30 per cent of annual after-tax profits to shareholders.

In 2023, VPBank spent nearly VNĐ8 trillion to pay dividends to shareholders. The lender plans to carry out cash dividend distributions in the upcoming years earlier, specifically in the first half of the year, in order to meet the shareholders’ desires for the bank’s profit allocation plan.

Chairman of the Board of Directors of Tiền Phong Commercial Joint Stock Bank (TPBank), Đỗ Minh Phú stated that if business operations are favourable and achieve significant growth, the bank will continue to pay cash and stock dividends to shareholders in the future.

“The dividend payout ratio will be considered by the Board of Directors from time to time, but the cash portion will account for a significant amount,” Phú said.

Last year, TPBank disbursed about VNĐ4 trillion to pay cash dividends to shareholders at a rate of 25 per cent.

HDBank, Asia Commercial Joint Stock Bank (ACB) and MBBank also distributed a portion of cash dividends in 2023.

For shareholders, the cash dividend distribution reflects the strength of the banks, indicating a solid capital foundation and translating into tangible returns on their long-term investments.

However, banks are also encouraged to distribute dividends in the form of shares to bolster their capital and strengthen their financial resilience against future risks. — VNS