|Counting the money at Maritime Bank. (Photo: SGGP)|
Despite the global economic recession, banking shares saw average profits much higher than the maximum level of savings interest rates.
Most major banks said they met profit targets last year, while some even exceeded 150 percent of their goals. In general, the banking industry reaped an average profit of 15-20 percent of their chartered capital.
Experts said this level was rather high as many banks in the United States only reached a profit of 1-2 percent of their chartered capital.
The US’s Moody’s Investors Service also said profits of Vietnamese banks were much higher than banks in other countries.
With large earnings, banks paid dividends at high rates, and mostly by cash.
Maritime Bank announced it paid advance dividends at the rate of 12.5 percent. The bank’s profit reached 147 percent of last year’s target, and 213 percent of that in 2008.
Vietnam International Bank also said it would pay dividends by cash at a rate of 13.2 percent of the shares’ total face value.
Military Bank decided to pay 18 percent of its average chartered capital.
Other banks, including Asia Commercial Bank (ACB) and Vietnam Export-Import Bank also advanced dividends for their shareholders at rates of 7-9 percent in the first six months of last year. With positive business results, shareholders expected they would receive a higher dividend rate.
However, according to the general director of ACB, the Board of Directors hadn’t decided to raise its dividend rates.
In 2009, banks faced decreasing revenue from credit activities as input expenses rose while they were still limited to the maximum lending amount. So most banks didn’t raise dividend rates despite exceeding the year’s targets. Meanwhile, although average- and small-size banks met many difficulties, they still paid dividends at the rate planned in the beginning of last year.
Currently, there is a shortage of dong though most banks paid dividends by cash, except some small banks which paid by shares to increase their chartered capital following an order from the State Bank of Vietnam.
Tran Van Vinh, general director of Orient Commercial Bank, said the organization paid dividends in December last year and asked shareholders to let it use the money to buy shares to increase capital.
The dividend rates at around 12.5-20 percent were rather high compared to the current savings interest rates. However, these rates were still low in comparison with firms in other sectors.