Cash dividends from banks boost investors' interest
News of many banks planning to pay dividends, especially cash dividends, have attracted attention from investors in the first month of the new year.
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| Illustrative image (Source: Techcombank) |
Techcombank proposed an annual cash dividend payment of at least 20% of total profit, equivalent to 4-5% of the bank's equity at the beginning of the year, an estimated 1,500 VND 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 22.9 trillion VND (930.3 million USD), exceeding the plan of 22 trillion VND approved by the General Meeting of Shareholders in April 2023.
Previously, the Vietnam International Commercial Joint Stock Bank (VIB) was the first bank to announce cash dividends this year.
VIB has decided to spend more than 1.5 trillion VND to advance the cash dividends in 2023 for existing shareholders at a rate of 6%. Accordingly, shareholders who own 1 share will receive 600 VND. 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% 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 8.64 trillion VND last year, while its undistributed profits as of December 31, 2023 are expected to reach nearly 9.2 trillion VND.
Last year, VIB had two dividend payments in March and May with dividend rates of 10% and 5%, respectively. It also paid stock dividends to increase charter capital at a rate of 20%.
The bank issued an additional 7.6 million ESOP shares to employees in June 2023. VIB's charter capital accordingly increased to nearly 25.4 trillion VND.
Similarly, Ngo Chi Dung, 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% of annual after-tax profits to shareholders.
In 2023, VPBank spent nearly 8 trillion VND 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 Tien Phong Commercial Joint Stock Bank (TPBank) Do Minh Phu 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," Phu said.
Last year, TPBank disbursed about 4 trillion VND to pay cash dividends to shareholders at a rate of 25%.
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.
(Source: VNA)
