Techcombank plans 10% stake issue to foreign strategic investors

Major Vietnamese private lender Techcombank plans to issue a 10% stake to overseas strategic investors, given its current self-capped foreign ownership of 22%, said chairman Ho Hung Anh.

This will facilitate the issuance of shares at higher prices and deliver greater benefits to shareholders, Anh told the bank’s AGM on Saturday.

The regulatory foreign ownership limit in a local bank in Vietnam is 30%.

This year, Techcombank, listed on the Ho Chi Minh Stock Exchange (HoSE) as TCB, will spend VND5.28 trillion ($207.6 million) on a cash dividend payout at a rate of 15%. This will be its first cash dividend in 10 years.

It will also distribute dividends in the form of shares at a 1:1 ratio, Anh said. With its current owner's equity of over VND130 trillion ($5.1 billion), the bank is fully capable of making dividend payments and maintaining capital operations in tandem, he added.

Anh also said that TCB intends to double its charter capital to VND70.45 trillion ($2.77 billion) from VND35.22 trillion by issuing shares from its equity, which is expected to include retained earnings, reserve fund for additional charter capital, and share surplus based on self-reported financial results and audited financial statements for 2023.

In response to shareholders' inquiries regarding TCB's Q1 performance, Anh said business results were favorable, exceeding set targets. However, he did not provide specific details.

Reviewing the lender’s 2023 performance, Techcombak CEO Jens Lottner said that it had earned a consolidated pre-tax profit of VND22.9 trillion ($890 million), surpassing the year's plan by VND900 billion. Its total lending increased 19.2% year-on-year to VND530.15 trillion ($20.84 billion). The capital adequacy ratio (CAR) was maintained at 14.4%, much higher than the minimum requirement of 8%.

Lottner said that the firm has targeted a 16.2% credit increase this year, as also capital mobilization growth in line with the actual credit growth rate. It also aims for an 18.4% year-on-year increase in profits to VND27.1 trillion ($1.07 billion), he added.

Lottner emphasized that TCB will not engage in acquiring weak banks as some other peers join the restructuring of distressed banks to achieve a larger credit growth quota. Currently, it is involved in restructuring some loans for businesses to enhance their capital access, he said.

Techcombank’s board of directors for the 2024-2029 tenure will comprise: chairman Ho Hung Anh; Masan Group chairman Nguyen Dang Quang; Nguyen Thieu Quang, a member of Masan’s board of directors; Eurowindow Holding chairman Nguyen Canh Son; Ho Hung Anh’s younger brother Ho Anh Ngoc; TCB’s acting chief risk officer Nguyen Thu Lan; Saurabh Narayan Agarwal – managing director and head of private equity at Warburg Pincus LLC; and two independent members Pham Nghiem Xuan Bac and Eugene Keith Galbraith.