Hanoi (VNA) – The Vietnam ProsperityJoint Stock Commercial Bank (VPBank) plans to increase its current chartered capital from 15.7 trillion VND (around 691.6 million USD) to 27.8 trillion VND (1.22 billion USD) in 2018,the bank announced at its shareholders’ recent meeting.

The plan for raising charter capital includes the followingmechanisms: issuance of shares for dividend payments instead of cash, issuanceof shares using reserves to supplement charter capital, issuance of shares toVPBank staff under the Employee Stock Ownership Plan (ESOP) programme, privateshares placement for local and foreign investors and the distribution ofsurplus capital.

The bank plans to make dividend payments in the form ofcommon shares by utilising retained profits after allocating profit in 2017 andissuing common shares to raise capital from owner’s equity.

In the second quarter of 2018, VPBank also plans to issueshares worth nearly 337 billion VND - equivalent to about 1.7 percent of thebank’s charter capital at the time of issuance - to its staff under the ESOPprogramme.

In third quarter of 2018, the bank will buy over 73million dividend preferred shares, with capital sourced from thefirm’s capital surplus (1.3 trillion VND) and development investment fund (1.2trillion VND).

VPBank will conduct private placement for local and foreigninvestors to raise charter capital. The maximum offer is about 15 percent oftotal common shares at the time of issuance.

The last mechanism to raise charter capital will beimplemented in the fourth quarter by distributing bonus shares from capitalsurplus gains after the 2017 private placement. The total surplus distributedto common shareholders is expected to be more than 4.6 trillion VND. Aftersurplus distribution, the charter capital will be raised to 27.8 trillion VND.

With the tentative 12 trillion VND capital surplus as resultsof the abovementioned actions, VPBank plans to use 8.500 billion VND to raisemid- to long-term capital to serve credit growth.

At this meeting, VPBank’s shareholders also approved thebank’s business plan for 2018. Main targets include reaching total assets of359.4 trillion VND, customer deposits and valuable papers of 241.7 trillionVND, a non-performing loan ratio below 3 per cent and profits before taxreaching 10.8 trillion VND.

By the end of fiscal year 2017, VPBank was named one ofVietnam’s top five joint-stock commercial banks and one of the country’s topthree retail joint-stock commercial banks.-VNA