Corporate bonds equal to 1.6% of HDBank’s total outstanding loans, lowest among banks

Corporate bonds accounted for just 1.6% of Vietnamese lender HDBank’s total outstanding loans at the end of last year, the lowest ratio in the country’s banking system, its CEO Pham Quoc Thanh said.

As of December 31, 2022, HDBank’s corporate bond loans totaled VND4.3 trillion ($183 million), including about VND2 trillion with construction companies and only half of that figure with real estate developers, he told his bank’s Wednesday annual general meeting (AGM) in Ho Chi Minh City.

The debtholders have been making regular payments to the HCMC-based bank as scheduled, while the loans are fully mortgaged with collateral, the banker said.

At the AGM, shareholders approved HDBank’s 2023 business targets, including a pre-tax profit of VND13.2 trillion ($562 million), up 29% over last year's performance.

Its 2023 total assets are expected to reach VND520 trillion ($22.15 billion), up 25% year-on-year, while charter capital will rise to VND29.3 trillion (nearly $1.25 billion), up 16%. HDBank aims to keep its bad debt ratio under 2% this year.

The AGM also approved HDBank’s plans in which another Vietnamese bank, deemed weaker, would be incorporated into it as part of the State Bank of Vietnam’s scheme to continue to improve the whole banking system.

Thanh said this would mean the central bank would grant it a higher credit growth cap than last year to further drive growth.

For this year, HDBank’s dividend will be paid in cash or shares with a total payout ratio of 25% (cash 10% and shares 15%). The lender plans to issue 20 million employee stock ownership plan (ESOP) shares this year, and to acquire a securities firm. HDBank did not disclose the name.

HDB shares closed Thursday at VND19,000 ($0.81), up 0.53% over Wednesday.