Deputy Prime Minister Vuong Dinh Hue (Photo: cafef.vn)
Hanoi (VNS/VNA) - 💦The Government has finally announced a roadmap to increasecharter capital for large State-owned banks in the first quarter of this year.
During a working visit toMilitary Bank after the Lunar New Year holiday, Deputy Prime Minister Vuong Dinh Hue said that the Government would increasecharter capital by 10 trillion VND (429 million USD) for Vietcombank and Vietinbank in Q1 2020. As for Agribank, all itsprofit in 2020 will be used to increase capital instead of contributing to theState budget. It was the first time theGovernment detailed a roadmap for the banks’ capital hike since 2016 when thebanks asked for the increase. The State Bank of Vietnam (SBV), on behalf of the State,currently holds 74.8 percent of capital in Vietcombank and 64.46 percent inVietinbank. Meanwhile, fully State-ownedlender Agribank is preparing to launch its IPO in the near future. If getting the funding rightin this quarter, the three banks could better meet Basel II standards this yearas required by the SBV as well as be qualified to expand credit to supportthe country’s economic growth. The banks are under greatpressure to hike capital to satisfy Basel II standards, which arerecommendations on banking laws and regulations issued by the Basel Committeeon Banking Supervision. Under the SBV’s regulations,banks must maintain a capital adequacy ratio (CAR) of at least 8 percent as perBasel II norms starting in 2020. The CAR of State-owned banks will fail toreach the minimum level set by the SBV if they fail to increase capital. Raising capital has been astruggle for Vietnamese banks in recent years. For example, Vietinbank - thefourth largest listed bank - has seen its capital remain unchanged since 2014at 37.23 trillion VND. Earlier, Fitch Ratingsestimated the Vietnamese banking system could face a capital shortfall ofalmost 20 billion USD,equal to 9 percent of GDP, to meet Basel II and increase allowance coverage toa level that reflects underlying asset-quality problems. Many local banks also issueda large amount of bonds to raise capital last year. The latest reportfrom Saigon Securities Incorporation (SSI) showed that banks issued bonds worth94 trillion VND in the first eleven months of 2019. The issuance made banks the main player inthe corporate bond market in the period, accounting for 45.5 percent of themarket’s total bond value./.
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A trade official has suggested companies work closely with shipping lines, airlines, and freight forwarders to monitor routes, transit times, and potential surcharges while exploring broader cargo insurance to cover risks like war and terrorism.
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The industry's performance has been powered by bold investments in modern production lines, enabling Vietnamese firms to produce complicated products which were exclusive to advanced economies.
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This is the second year the magazine has released the ranking, which is based on total revenue and key financial indicators of enterprises from seven countries in the region: Vietnam, Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Cambodia.
At the summit, publishing, tech, and media sectors will discuss emerging trends, business models, and sustainable solutions for digital publishing development in Vietnam.
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Deputy Prime Minister Vuong Dinh Hue (Photo: cafef.vn) 
