HCMC – Vietnamese banks are ramping up efforts to raise charter capital through share issues and stock dividends as they prepare for stronger credit growth in 2025 and tighten compliance with Basel III capital requirements.
During the annual general meeting season, many banks have unveiled major capital-raising plans to enhance financial resilience and expand lending, reported the Vietnam News Agency.
VietinBank plans to raise its charter capital from VND53.7 trillion to VND77.7 trillion by issuing nearly 2.4 billion shares, equivalent to a 44.64% increase. The bank also proposed retaining all profits from 2024 to 2028 to strengthen its capital base and support lending expansion.
Vietcombank is set to issue over 2.76 billion shares as stock dividends, representing a record payout ratio of 49.5%—its highest since 2016. This will boost its charter capital from VND55.89 trillion to VND83.56 trillion.
BIDV, another state-run lender, recently distributed 21% stock dividends from its 2022 profits. In 2025, it plans a 20% bonus share issuance to further raise capital and align with Basel III standards. The bank also completed a private placement of 123.8 million shares, increasing its charter capital to VND70.2 trillion and lifting its capital adequacy ratio (CAR) from 9.9% to around 10.5%.
Several privately-owned banks are also pursuing capital increases via stock dividends.
ACB plans a 25% dividend, including 15% in shares and 10% in cash, raising its charter capital to VND51.37 trillion. HDB and VIB have proposed dividend payouts of 30% and 21%, respectively, combining cash and shares. Other banks planning high stock dividend ratios include VPB, MBB, SHB, and TCB.
According to SSI Research, capital increases will enable banks to expand lending, improve asset quality, and maintain competitiveness amid tight profit margins. Net interest margins are expected to remain flat or slightly decline in 2025, putting pressure on banks to boost capital and manage bad debt effectively.
The Government has set a 16% credit growth target for 2025, which will require banks to strengthen their capital positions to meet the minimum CAR threshold.
VIS Ratings, a credit rating agency, noted that while the banking sector’s capital base remains modest due to difficulties in raising fresh funds, stock dividends can help retain earnings, support credit growth, and enhance capital buffers.
To meet Basel III and the State Bank of Vietnam’s target CAR of 10.5% by 2033, banks must pursue various capital-raising strategies.
Analysts suggested that while stock dividends are a common method, banks need more sustainable fundraising approaches. SSI Research recommended issuing private bonds to attract long-term funding at reasonable costs, thereby improving capital ratios and supporting credit and investment activities.
