Saigon-Hanoi Bank to raise charter capital to $1.56 bln

The Saigon-Hanoi Bank (SHB), one of the top private banks in Vietnam, plans to increase its charter capital from VND30.67 trillion ($1.3 billion) to VND36.65 trillion ($1.56 billion), maintaining its position in the top five Vietnamese private banks in terms of chartered capital.

On Thursday, the State Bank approved SHB's proposal to issue shares to pay dividends for 2022 to existing shareholders at a rate of 18%, and issue shares under the Employee Stock Ownership Plan (ESOP).

The increased charter capital will improve the bank's financial capacity and competitiveness amid the country's international economic integration, while meeting the expectations of shareholders, it said.

SHB has targeted a pre-tax profit of over VND10.6 trillion ($450.5 million) in 2023, up 9.67% year-on-year, and total asset growth of 10.09%.

In the first quarter of 2023, SHB's total operating income reached VND6.2 trillion ($263.67 million), up 32.2%. The bank's net interest income reached VND4.99 trillion ($191 million), up 35% and pre-tax profit was VND3.62 trillion ($153.85 million).

On May 23, SHB completed a 50% stake sale of SHB Finance, its consumer finance arm, to Thailand's Krungsri Bank. The two sides will complete the sale of the remaining 50% in the next three years, according to SHB.

In August 2021, SHB and Krungsri reached an agreement on the latter’s acquisition of SHB Finance with a total value of VND3.59 trillion ($153.12 million), marking the Thai lender’s entrance into Vietnam as part of its ASEAN expansion.

According to a release from the Thai lender, also a strategic member of Japan's financial giant MUFG Group, the transfer includes two phases of VND1,573 billion ($67.09 million) for a 50% stake, and then VND2,017 billion ($86.03 million) for the remainder.

Over nearly five years of operations, SHB Finance has ranked among the top 10 largest consumer finance companies in Vietnam with a business network across 51 provinces and more than 7,000 employees, company data shows.

In mid April, IFC, the World Bank’s investment arm, decided to invest $120 million into SHB to help the Vietnamese lender expand financial access for small and medium enterprises.