Three Banks Successfully Raise Charter Capital

The State Bank of Vietnam (SBV) has recently issued a series of decisions to amend the content of charter capital in the establishment and operation license of some banks.

Specifically, the charter capital of Vietnam International Commercial Joint Stock Bank (VIB) was adjusted from VND7,834 billion to VND 9,245 billion.

Earlier, the bank successfully issued 141 million shares to existing shareholders, equivalent to an 18% issuing ratio.

The charter capital of Orient Commercial Joint Stock Bank (OCB) also increased from VND6,599 billion to VND7,898 billion after 130 million shares were issued to pay dividends at 20% issuing ratio.

Similarly, Southeast Asia Commercial Joint Stock Bank (SeABank) also completed raising its chartered capital from VND7,688 billion to VND9,369 billion after offering 168 million shares to existing shareholders.

Contrary to the above banks, at the recent extraordinary general meeting of shareholders (EGM) of Dong A Commercial Joint Stock Bank (DongA Bank), the plan to offer shares to supplement charter capital was not approved when only 63% of shareholders agreed. Therefore, the bank will report to the State Bank to consider restructuring under another plan.

Reportedly, the increase of charter capital by SeABank, VIB and OCB is in the plan of applying Basel II standards.

In accordance with the SBV's schedule, commercial banks are expected to have their own capital to meet Basel II standards by 2020, in which at least 12-15 banks will successfully apply Basel II.

According to the SBV, at present, the CAR of many banks is over 9%. However, if calculated according to the new method prescribed in Circular 41, this figure is only 6-7%, while banks must maintain a minimum CAR of 8%.

Therefore, from now to the end of the year, all banks in the system must increase charter capital if their CAR doesn’t meet the standard.

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