On April 22, 2021, at Melia Hotel Hanoi, Saigon – Hanoi Bank (SHB) successfully held the 29th General Meeting of Shareholders. The meeting unanimously approved all the major contents. In particular, the goal is to grow at least 78% of profit in 2021, with a vision towards 2025 to become the No. 1 bank in terms of business efficiency and technology.
Shareholders are happy with impressive business results
Shareholders attending the 29th SHB General Meeting of Shareholders expressed their excitement at the bank’s impressive business results in 2020.
Speaking at the General Meeting, a long-holding shareholder of the bank said: “I am very pleased with the achievements that SHB has achieved over the past time, showing the great efforts and determination of the Bank’s Board of Directors, especially thanks to Chairman Do Quang Hien – a very responsible leader. With the comprehensive direction of the leaders, it is certain that in the coming time, the bank will achieve more outstanding successes. In addition, last year was a successful year for SHB when the share price rose sharply to new heights. I congratulate the bank on the success and hope in the future, the share price will continue to break through and reach the Top 5 commercial banks in Vietnam.”
Taking into account shareholders’ comments, Chairman of the Board of Directors Do Quang Hien said: “In previous years, there were shareholders who were concerned about the responsibility of the Board of Directors to boost up the share price. We only have the responsibility to make good performance, good governance as foundation for SHB to develop healthily and transparently, investors will analyze and evaluate the performance by themselves; The value of the business determines the value of the share. SHB’s share price increase also showed that it could attract the attention from investors, confirming SHB’s present and future value.”
In 2020, although the economy in general was affected by the Covid-19 pandemic, SHB still grew sustainably with many impressive indicators and almost completed before deadline the backlogs of Habubank merger project. As of December 31, 2020, SHB has total assets of more than VND 412 trillion, up 13%; mobilized capital from market 1 reached VND 338 trillion, up 17.2%; credit balance reached VND 317 trillion, up 19%; pre-tax profit reached VND 3,268 billion, up 8% compared to 2019; the ratio of operating expenses to total net income (CIR) fell to 35.2%, the lowest in the past 5 years; NPL ratio fell to 1.83%, lowest in the last 5 years, NPL ratio including VAMC bonds fell below 3%, fulfilling the targets assigned by the State Bank.
In particular, SHB completed three pillars of the Basel II Capital Treaty ahead of schedule, fully complied with the requirements of the State Bank of Vietnam, received positive reviews from international organizations, and contributed to improving the position and reputation of SHB in particular and the whole Vietnamese banking industry in general. The consolidated capital adequacy ratio under Basel II reached 10.1% (SBV’s regulation is >8%). SHB has also had an independent assessment report by an international audit firm, KPMG, on the completion of all 3 pillars of Basel II.
Chuyển đổi mạnh mẽ, bứt phá ngoạn mục năm 2021 transformation,
Following the outstanding success in the 2020 business strategy, SHB addresses two scenarios of the 2021 profit plan. Scenario 1, in case the bank completes the issuance of additional shares to the public in the third quarter of 2021, the additional capital used for business activities will contribute to increasing the bank’s profit, which is expected to reach VND 6,128 billion, an increase of 87% compared to the previous year. Scenario 2, SHB completes the public offering of shares in the fourth quarter of 2021, the profit plan is expected at VND 5,828 billion, up 78%.
In response to questions from shareholders about the feasibility of profit growth of two scenarios in 2021, especially in the context that the market continues to be affected by the epidemic; The bank’s management said that SHB had carefully calculated financial indicators and took cost-saving measures, according to which the profit plan of VND 5,828 billion this year was certainly realized. With the scenario where charter capital is increased sooner, it will create conditions for the bank to supplement operating capital, making the profit plan of VND 6,128 billion feasible.
By the end of the first quarter of 2021, the bank’s total assets reached more than VND 418 trillion, profit before tax amounted to VND 1,664 billion, more than doubled over the same period last year.
In addition, SHB has been carrying out a comprehensive transformation with appropriate strategic initiatives, promoting the ecosystem of potential customers and the distinct value chain, which is the bank’s advantage. SHB aims to form a digital culture, a digital bank that provides a great experience, optimizes costs and customer satisfaction; this will help the bank significantly increase demand deposit ratio (CASA), thereby effectively contributing to overall profit. With the establishment of the Digital Banking Division, focusing on customers, SHB has been implementing several key projects and softwares, with the advice of the world’s leading prestigious organizations; Launching new products and services, initiatives to digitize new operating processes, digitize customer journeys, thereby increasing market access, scale expansion and sustainable growth. Not only in 2021, but also in the coming years, SHB’s profit will make huge growth steps, towards the vision of 2025 to become the No. 1 bank in terms of business efficiency and profit.
Specifically, SHB’s business plan for 2021 has been approved by the General Meeting of Shareholders as follows:
Estimated key financial indicators in 2021 of SHB
Unit: VND billion
|No.||Criteria||2021 plan||Vs. 2020|
|2||Charter capital (*)||26,674||9,164|
|3||Mobilization from organizations and individuals||388,549||50,420|
|4||Credit balance (**)||361,003||44,333|
|5||NPL loans (%)||<2%|
|7||Planned dividend payment ratio (%)||15%|
Increasing shareholder benefits and opportunities for foreign investors
Regarding the change of listing exchange, recently, SHB has received an official letter from Ho Chi Minh City Stock Exchange informing that SHB’s documentation has met the conditions under the Securities Listing Regulation of HOSE. The organization of official trading of the bank’s shares on HOSE will be done after technical infrastructure conditions are met.
Regarding the plan to increase charter capital, in 2021, SHB will raise its capital to VND 26,674 billion, of which the first source will be added from SHB’s 2019 dividend payment to shareholders at the rate of 10% as approved by the State Bank and the State Securities Commission. Expected completion date is in May 2021. After completing the dividend payment, SHB’s charter capital will increase to more than VND 19,260 billion.
The second source is from the 2020 dividend payment at the rate of 10.5%. After the General Meeting of Shareholders, the Bank will submit this plan to the State Bank for approval. The third source, the Bank will raise capital by offering shares to existing shareholders by means of call option at the rate of 100:28, the expected offering price is VND 12,500/share – less than half of the current price on the stock market. This will help increase shareholder benefits even when stock dilution is taken into account, and at the same time, SHB also has an additional capital surplus. The increase in charter capital is aimed at improving financial potential, expanding lending scale, investing in information technology, especially promoting the digitization of banks, realizing the goal of becoming a modern, universal retail bank with optimal financial products and services following 4.0 standards.
In response to shareholders’ questions about the divestment of SHB’s capital at SHBFC, the bank said it has selected 2-3 major partners. It is expected that the bank shall successfully divest in 2021. This divestment will also ensure a significant capital surplus for shareholders, as well as bring SHB to the new level.
In addition, in order to find and select foreign investors with suitable capacity, support to bring the highest benefits to shareholders, customers, and to the bank, the General Meeting of Shareholders has approved the ownership ratio of SHB’s foreign strategic investors at no more than 20% of charter capital; finalized the foreign ownership rate of SHB at Vietnam Securities Depository Center at 10% to find and choose strategic partners.
Currently, there are a number of large international financial groups, banks and investment funds interested in and wish to become an investor of SHB. The fact that Corporations, Banks and Investment Funds become major shareholders of SHB is in line with the strategic goals and interests of SHB’s shareholders, partners and customers. The Board of Directors has submitted a plan which is approved by shareholders to raise capital by VND 5,000 billion from the issuance of shares for foreign investors and foreign strategic investors.
The General Meeting also approved the plan to issue international bonds with a total issuance value of USD 500 million with a term of 3 to 5 years according to the program (Euro Medium Term Note – EMTN) and will list international bonds on Singapore Stock Exchange upon completion of the issuance. Issuing bonds to the international market will contribute to enhancing the position, bringing SHB brand to reach out in the financial market; diversifying capital mobilization channels; creating a solid foundation for the implementation of capital adequacy standards according to Basel II and international standards. Especially, for shareholders, the issuance of bonds to the international market not only increases profit margins, adds value to shareholders through the dividend payment plan; but also contributes to increase value for each shareholder in the long term.
Also at the meeting, shareholders approved the transfer of SHB’s capital in SHB Laos and SHB Cambodia to other investors with the maximum shareholding rate up to the Board of Directors of SHB’s decision, and change the operating model from a sole member limited bank into a limited liability model with two or more members or a joint stock bank depending on the laws of Vietnam and the host countries.