 DongABank, Eximbank delay votes on key positions
Saigon Times - 7/23/2015 8:23:37 AM
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Dong A Commercial Bank (DongABank) and Vietnam Export-Import Commercial Bank (Eximbank) sought approval from shareholders to postpone elections of the new boards of directors and controllers for the 2015-2020 term at their annual general meetings in HCMC on July 21.
Key position changes at DongABank
Speaking to shareholders, DongABank chairman Cao Sy Kiem said the bank has sent the central bank a list of eight nominees for the board of directors and three candidates for the board of controllers. However, it has yet to receive a reply from the central bank.
Besides, the bank will have to change the structure of its senior positions due to its plan to raise chartered capital. The actual makeup of the two boards will not be determined until the arrival of new investors.
At the meeting, Kiem announced to resign from the post of DongABank’s chairman for personal reasons, two years after taking the helm of the bank headquartered in HCMC.
DongABank also asked shareholders for approval to sell 100 million shares worth VND1 trillion by private placement to the consumer goods maker KIDO and increase its chartered capital to VND6 trillion (US$275 million) from VND5 trillion. If the share sale is successful, KIDO will become the bank’s largest shareholder with a 17% stake.
All the proceeds from the share sale will be used to strengthen the bank’s payment and lending capability.
According to DongABank general director Tran Phuong Binh, the lender obtained VND102 billion in pre-tax profit in the first six months of this year. But as DongABank is dealing with bad debt, the central bank will not approve its dividend payment scheme.
Earlier, DongABank did not give dividend to its shareholders in the previous two years.
In 2014, the bank reported its consolidated after-tax profit of just VND26.9 billion and distributable profit of only VND21.4 billion. Its bad debt stood at 3.76%.
Le Hung Dung to withdraw from Eximbank board
Eximbank’s new board of directors has not been elected and the bank will hold an extraordinary general meeting to do so as approved by the central bank, instead of at its general meeting in HCMC on July 21.
Pham Huu Phu, general director of Eximbank, told shareholders that the 2010-2014 term had come to an end and a new board of directors should have been in office.
Phu said Eximbank has submitted the central bank a list of candidates for the new term but the banking sector regulator is still considering it and will make a decision soon. The central bank allowed Eximbank to hold a general meeting without elections of a new board of directors.
Le Hung Dung, chairman of Eximbank, told the meeting that he would not run for the next term. The bank’s current board of directors will stay until a new board is formed.
Last year saw Eximbank posting pre-tax profit of only VND69 billion (US$3.16 million), accounting for 3.8% of the 2014 plan due to high risk provisions as 20% of its bad debt was sold to the Vietnam Asset Management Company (VAMC).
Eximbank reported bad debt of 2.46% at the end of last year. The bank will not pay a dividend for 2014 due to high provisions for bad debt.
Van Thai Bao Nhi, deputy general director of Eximbank, said the bank hoped its bad debt settlement process will be easy given a recovery of the real estate market.
Phu said as Eximbank paid higher dividends for shareholders than other banks in previous years, it has not much money left for future investments.
Eximbank has focused too much on credit growth and given more power to branch directors, leading to several shortcomings. The bank obtained over VND1.9 trillion in profit last year but had to set up risk provisions and sell debt to VAMC, Phu added.
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