Vietnamese Government Proposes 20.6 Trillion VND Capital Injection for Vietcombank

The Vietnamese government recently submitted an important proposal to the National Assembly, recommending a state capital injection of 20.695 trillion VND (approximately $842.8 million) into the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank). This proposal aims to enhance Vietcombank’s financial strength, helping it become one of the top 100 banks in Asia and expand its international influence.

During a meeting of the National Assembly Standing Committee, Governor of the State Bank of Vietnam, Nam Nguyễn Thị Hồng, elaborated on this proposal. She explained that the funds would come from Vietcombank’s accumulated profits at the end of 2018 and stock dividends allocated to state shareholders from the remaining 2021 profits. Hồng emphasized that increasing Vietcombank’s state-owned capital aligns with Vietnam’s banking sector development strategy for 2025 and vision for 2030, as well as the 2021-2025 plan for credit institution restructuring and non-performing loan resolution.

The main objective of this capital injection plan is to enhance Vietcombank’s financial capacity, enabling it to expand its influence on the international stage and ultimately rank among Asia’s largest banks. Simultaneously, this move will consolidate Vietcombank’s leadership position in Vietnam’s financial and banking sector.

Furthermore, with increased capital, Vietcombank will be better equipped to implement government policies and support economic growth. For instance, the bank can provide more credit support for agriculture and rural development, and implement other preferential interest rate programs. Hồng also pointed out that Vietcombank will have sufficient resources to support financially weaker credit institutions, play a crucial role in ensuring financial system safety, and contribute to the healthy and stable development of the banking sector and the overall economy.

National Assembly Chairman Trần Thanh Mẫn acknowledged the necessity of increasing Vietcombank’s state capital. He believes this will help improve the bank’s financial capacity, ensure it meets minimum capital adequacy requirements, and promote its larger role in the banking sector and overall economy. However, Mẫn also emphasized the need for a more careful assessment of the impact and efficiency of this capital increase plan.

While most participants viewed the proposal positively, some expressed concerns that the capital increase might affect Vietcombank’s credit rating. This perspective indicates that decision-makers need to comprehensively weigh the pros and cons when considering this major financial initiative.

Key points:

  • The Vietnamese government proposes a 20.695 trillion VND state capital injection into Vietcombank.
  • This move aims to enhance Vietcombank’s financial strength, helping it become one of Asia’s top 100 banks.
  • Funds will come from Vietcombank’s accumulated profits and stock dividends.
  • The capital increase plan aligns with Vietnam’s long-term banking sector development strategy.
  • Vietcombank will have a stronger capacity to support government policies and economic growth.
  • The National Assembly Chairman supports the proposal but calls for careful assessment of its impact.
  • Concerns were raised about the potential impact on Vietcombank’s credit rating.

Publications

Latest News

Our Consultants

Want the Latest Sent to Your Inbox?

Subscribing grants you this, plus free access to our articles and magazines.

Our Vietnam Company:
Enterprise Service Supervision Hotline:
WhatsApp
ZALO

Copyright: © 2024 Vietnam Counseling. All Rights Reserved.

Login Or Register