Banks are accelerating capital increase at year end

Several banks in Việt Nam have been implementing major capital increase plans through stock dividends, private placements or offerings to existing shareholders in the final month of 2025.

VietinBank announced it would close its shareholder list on December 18 to issue 2.4 billion shares as dividend payments from remaining profits from 2021, 2022 and the 2009–16 period at a rate of about 44.64 per cent. Following the issuance, VietinBank’s charter capital is expected to increase significantly from nearly VNĐ53.7 trillion (US$2 billion) to VNĐ77.67 trillion.

On December 18, Saigonbank will also finalise its shareholder list to issue more than 22 million shares to existing shareholders at a ratio of 6.5 per cent. After the issuance, Saigonbank’s charter capital is expected to rise from nearly VNĐ3.39 trillion to nearly VNĐ3.61 trillion.

HDBank announced it would close the record date to pay dividends and bonus shares with a total ratio of nearly 30 per cent on December 19. Accordingly, shareholders owning 100 HDB shares will receive an additional 29.69 shares, including 25 per cent in dividends from undistributed after-tax profits in 2024 and 4.69 per cent in bonus shares from the capital reserve fund. After the issuance, HDBank’s charter capital will increase from VNĐ38.59 trillion to VNĐ50 trillion.

SHB announced a plan to increase its charter capital by VNĐ7.5 trillion ($285.2 million), raising it to more than VNĐ53.4 trillion in 2025. The plan includes issuing more than 459 million shares to existing shareholders, 200 million shares through private placement and more than 90 million ESOP shares.

According to experts, banks are increasing their charter capital to gradually meet international banking standards under Basel III, which impose higher requirements not only on the size but also on the quality of capital.

Increasing charter capital is considered the most direct and effective solution to help banks improve their capital adequacy ratio (CAR), as Circular 14/2025 regulating a higher CAR for commercial banks and branches of foreign banks has been in effect since September. The circular requires commercial banks to maintain Tier 1 core capital at 4.5 per cent, Tier 1 capital at 6 per cent and a CAR of at least 8 per cent. It also outlines a roadmap for increasing the CAR year by year, aiming for a minimum of 10.5 per cent by 2030.

Besides capital safety concerns, pressure to increase charter capital also stems from an imbalance in maturities between deposits and loans. Currently, banks’ main funding source remains short-term deposits, while the economy’s credit needs are concentrated on medium- and long-term loans for investment, production, business and real estate.

In the context of multiple intertwined pressures, increasing charter capital is seen as a fundamental solution to improve capital structure, reduce dependence on short-term funding and strengthen liquidity.