Banks resume cash dividends as financial health rebounds

As of now, 12 banks in Vietnam have either completed or are in the process of distributing cash dividends to shareholders, with the total payout approximating $1.7 billion. LPBank leads the pack in terms of both payout ratio and total cash distributed.

Three state-owned banking giants- BIDV, Vietcombank, and VietinBank- have recently announced their respective record dates for distributing cash dividends.

Specifically, Vietcombank is scheduled to finalise its shareholder list on October 6, with payment expected on October 24; BIDV will close its list on October 15, with a projected payment date of November 14; meanwhile VietinBank will also finalise its list on October 15 and aims to make payments by November 17.

All three banks are distributing cash dividends at 4.5 per cent. Accordingly, Vietcombank is set to pay approximately $150.4 million, the figure for BIDV is estimated at $126.36 million, and for VietinBank at $96 million. This marks the first time in four years that these banks have resumed cash dividend payments.

Techcombank has also finalised its shareholder list as of October 1 to distribute a 10 per cent cash dividend, with payments scheduled for October 22. The total payout is estimated at $283.4 million.

In addition to the four banks mentioned above, eight others have already completed their cash dividend payments since the outset of the year. These include LPBank, VIB, VPBank, TPBank, MB, OCB, ACB, and SHB.

Among them, LPBank stands out as the most aggressive payer. This year, it completed a 25 per cent cash dividend distribution to shareholders, disbursing $298.7 million. Techcombank comes second, with a payout reaching $283.4 million.

The third spot in terms of dividend payout remains open, as HDBank has yet to finalise its dividend distribution plan.

Earlier, HDBank’s leadership revealed that their intention to propose a maximum 15 per cent cash dividend. If the proposal is approved by shareholders, HDBank is likely to join the top three banks with the highest cash dividend payouts this year.

Other banks that have disbursed cash dividends so far this year include ACB, which paid $178.6 million at a 10 per cent payout rate; VPBank distributed $158.6 million at a 5 per cent rate; VIB followed with a 7 per cent dividend worth $83.4 million, while TPBank matched ACB’s 10 per cent rate, paying out $105.6 million, to name but a few.

The return of cash dividend payouts highlights a notable improvement in the financial health of the banking sector.

Since 2020, the State Bank of Vietnam (SBV) had imposed restrictions on cash dividends, urging banks to retain earnings to increase capital, handle bad debts, and create room to lower interest rates. This led most institutions to issue stock dividends instead.

However, beginning in 2023, the SBV began relaxing these restrictions for financially sound banks, aiming to strike a balance between the interests of small investors and major shareholders.

National flag carrier Vietnam Airlines, listed under code HVN, plans to pay cash dividends for 2018 at the rate of 10 per cent of charter capital, estimated at VND1.49 trillion (US$63.9 million).

The State Bank of Vietnam (SBV) has just taken additional measures, which requires commercial banks to proactively reduce and tighten operating costs to alleviate the growing concerns over the impact of COVID-19.

Vietnam International Bank recorded a pre-tax profit of more than $351.44 million over the past 10 months of 2022, up 44 per cent over the same period in 2021.