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Shareholders’ meetings uncomfortable for banks   2009-03-18 - VietNamNet/SGTT

Commercial banks are experiencing a hot shareholder meeting season with burning questions from shareholders.

 

Where’s my money?

 

 
Shareholders of Nam A Commercial Bank seem to be the most disappointed this year. The bank is paying dividends of 0.47011%, or VND47 per share. “I could not have imagined such a low dividend,” said Hoa, a shareholder of the bank.

 

Despite the unsatisfactory business results in 2008, with the profit of approximately VND14bil on the chartered capital of over VND1tril, the board of directors still submitted to the shareholders a plan to raise salaries of staffs, a move that really threw more oil onto the fire.

 

Hoa, the shareholder, said that the shareholders’ meeting was in chaos with many shareholders leaving before the meeting finished. The dividend for 2009 was approved at 9.5%, though many shareholders said that they do not expect to get dividends.

 

At the shareholders’ meeting of Sacombank, Dang Van Thanh, Chairman, and Tran Xuan Huy, General Director of Sacombank, repeated the words ‘difficulties’, ‘challenges’, so that the bank’s shareholders understand that 2009 will be a very challenging year for them.

 

Thanh tried to answer all the questions from shareholders, but the questions seemed not to satisfy everyone. Sacombank set an ambitious business target for 2009 with profit at VND1,600bil, which has raised doubts among investors.

 

The shareholders have every reason to have doubts about the feasibility of the business plan, since Sacombank obtained only 50% of its targeted profit in 2008. The shareholders wanted to know more details about what the bank would do to gain the profit.

 

It’s more difficult to persuade shareholders

 

Habubank’s shareholders’ meeting approved a plan to raise chartered capital from VND2,800bil to VND3tril. East Asia Bank also plans to raise capital from VND2,880bil to VND3,400bil.

 

Sacombank wanted to raise its capital from VDN5,116bil to VND6,700bil. However, a capital increase plan was opposed by ANZ, the foreign shareholder, which said that even big banks in the world were playing it safe in this period.

 

Thanh was also unable to completely reassure shareholders about the capital withdrawal by ANZ and the sales of stakes by local shareholder REE. “Strategic shareholders are very important. How can they come and leave so easily?” a shareholder asked.

 

The documents serving Sacombank’s shareholders’ meeting did not clearly stipulate the turnover structure of the bank in 2008, and did not elaborate on the plan on using the additional chartered capital in 2009. Shareholders still have questions about the intention of using VND600bil to build branch head offices, while the bank, in general, only leases offices in order to save money.

 

Meanwhile, managers of banks which are to organise shareholders’ meetings in the upcoming days also feel anxious. The director of a joint-stock bank admitted that the biggest worry for him now is how he will explain the business results of the bank at the shareholders’ meeting.



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