At the recent General Meeting of Shareholders held on April 27, 2025, VPBank announced a proposal for a 5% cash dividend, marking a significant milestone in the bank's financial strategy. Chairman Ngo Chi Dung emphasized that over three years ago, VPBank committed to a continuous cash dividend policy for five years, allocating a substantial VND 20,000 billion for this purpose. This announcement comes after a long period from 2010 to 2022, during which VPBank refrained from distributing dividends to focus on its development.
In the past three years, VPBank has successfully maintained cash dividends, distributing approximately VND 4,000 billion annually. Dung reassured shareholders that the bank intends to uphold this policy for the next two years, although the exact amount will be contingent on the bank's business performance. This commitment reflects VPBank's balancing act between shareholder expectations and the capital needs for growth.
During the meeting, a shareholder raised concerns about the current low stock price, suggesting that the board consider buying back treasury shares. However, Chairman Dung responded by highlighting that under the regulations set by the State Bank, purchasing treasury shares would reduce capital, which is counterproductive as the bank seeks to increase its capital base.
"When VPBank participated in the restructuring project with GPBank, our primary goal was to achieve a 35% growth in credit over five years. Balancing shareholder needs with growth capital is crucial, and since part of the capital has been allocated for dividends, we cannot proceed with treasury share buybacks," Dung explained.
Turning to the issue of bad debts, CEO Nguyen Duc Vinh addressed shareholder inquiries regarding the bank's exposure to real estate projects, particularly those linked to Novaland. He acknowledged that bad debts primarily stem from project-related issues, with about 30% of Novaland's projects having improved legal documentation while the remainder is still being finalized.
Vinh forecasted that bad debts would become more apparent in the first half of 2025, stabilizing in the latter half. He affirmed VPBank's commitment to maintaining credit growth in real estate within the framework allowed by the State Bank, focusing on supporting homebuyers, who currently account for over 40% of the bank's total outstanding real estate loans.
Regarding corporate bonds, Vinh stated that VPBank's outstanding corporate bond balance is currently under VND 10,000 billion, a relatively small figure compared to the bank's total outstanding debt. He assured shareholders that the bank would continue to partner with reputable businesses to advance the corporate bond market.
On the restructuring front, Chairman Dung expressed confidence in the successful turnaround of GPBank, which had been incurring average annual losses exceeding VND 1,000 billion before its transfer to VPBank in March 2025. He projected that VPBank would achieve a profit of at least VND 500 billion from GPBank this year.
Furthermore, Dung noted that due to the restructuring, VPBank has been granted permission to increase its foreign ownership limit to 49%. This adjustment is viewed as a significant opportunity for the bank to attract strategic partners and enhance its capital structure. "The ability to raise the ownership limit is crucial as it opens doors for potential partnerships and investments, especially if the macroeconomic conditions improve," he added.
In relation to FE Credit, VPBank aims to achieve reasonable profit growth this year, with expectations to restore FE Credit's profits to the range of VND 3,000 - 4,000 billion, as seen in previous years. Vinh indicated that the last six months of 2025 would be pivotal for FE Credit, as new lending portfolios begin to yield results while older portfolios face challenges.
VPBank is also poised to engage in the Government's pilot project to develop a digital asset market. Vinh acknowledged the risks associated with this venture but emphasized that financial institutions, including VPBank, cannot afford to remain on the sidelines. The bank is actively assessing potential partnerships and preparing to provide digital asset services once regulatory approvals are secured.
Moreover, regarding the establishment of a life insurance company, VPBank's leadership stated that the bank operates under a group model and cannot overlook the insurance segment. By creating its own insurance business, VPBank aims to gain greater control over product offerings and customer care processes, ensuring a cohesive experience for clients.
As the bancassurance landscape evolves, the bank intends to adapt to the changing regulatory environment while enhancing service quality and transparency. The market has seen a shift from exclusive partnerships to more open collaborations, allowing banks to diversify their product offerings and improve customer service.
In conclusion, VPBank's strategic decisions at this General Meeting of Shareholders reflect its commitment to balancing shareholder interests with sustainable growth, while navigating the complexities of the current financial landscape. The bank's proactive approach to restructuring, credit management, and exploring new market opportunities positions it favorably for future success.
