Mr. Duong Cong Minh says ‘I would be very happy if Sacombank could pay dividends'26/04/2019
The Annual General Meeting (AGM) of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) held in the morning on April 26 was tense as shareholders asked the Board members about not paying dividends during the past 4 years.
"We have to be patient and have suffered a flat stock price to look forward that Sacombank will regain the glory. The bank must share with us by reducing employee bonuses from 20% of an excess of pre-tax profit target to 10% and the remuneration of the Board of Directors from 2% of pre-tax profit to 1% to pay dividends,” a shareholder suggested.
In response to the suggestion, Sacombank’s Chairman Mr. Duong Cong Minh said that the bank has been in the restructuring phase; hence, it is not allowed to decide to pay dividends although retained earnings in the latest two years were nearly VND2,800 billion.
"Sacombank is the only restructuring bank to make a profit, therefore, it has sent the proposal to the SBV to seek for the approval to pay dividends many times. However, the SBV did not approve as the bank needs to focus on carrying out the restructuring project. I promise you that I will continue to persuade the regulators to approve dividends payout suggestion, I am also the largest shareholder of the bank. If I received dividends, I would be very happy," Mr. Minh said.
He also said that the great success that he and his employees have made since his appointment is to make the bank regain its position. As a result, the bank can lower deposits interest rates and increase lending interest rates to improve its profit margin, however, compared to other banks, the average salary and bonus of its employees is still much lower. Besides, the Board of Directors previously had 11 members, while it currently has only 7 members, the workload has increased and it has been more complicated.
"Those are the reasons why I cannot swallow my words, reducing bonuses to employees for dividends payout," Mr. Minh said.
The Board of Management of Sacombank admitted that after two years of implementing the restructuring project post the merger of Phuong Nam Bank, the failure of dividends payout due to dealing with a backlog of work relating to its finance has caused dissatisfaction of shareholders in the proposal to the AGM. In addition, non-performing assets are still very large and the process of recovery and handling of collateral has depended on the real estate market movements.
However, the bank reported some positive signals such as average growth rate per year in deposits and loans of 10.6% and 13.7%, respectively. Return on equity ratio as of year ended 2018 soared to 7.03%. Sacombank has targeted a pre-tax profit of 2019 to reach VND2,650 billion, up 18% year-on-year, total deposits and outstanding loans to increase by 14% and 16%, respectively. Total assets of 2019 are expected to be at least VND455,500 billion, an increase of 12% year-on-year.