Ho Chi Minh City Development Bank (HDBank, HDB on HSX) announced that it would pay 2017 dividends in cash and preferential shares at the ratio of 35 per cent. This is the highest in the Vietnamese banking sector.
|HDBank recorded strong growth in 2017 with a positive outlook for 2018 and onwards|
HDBank went through a historic year in 2017, with VND2.4 trillion ($105 million) of pre-tax profit, up 110.6 per cent from the previous year, exceeding the goal set by its annual general shareholders’ meeting by 85.9 per cent.
Thanks to these positive results, the bank decided to pay dividend to its shareholders at the ratio of 35 per cent, including 15 per cent in cash and 20 per cent in preferential shares. This is a rare case in the banking sector, as most financial institutions in Vietnam often pay dividends in shares only.
In a few extreme cases, some banks even fail to pay dividends due to poor results. HDBank, on the contrary, pays dividends regularly.
The regular dividend payout is testament to the bank’s commitment to serving shareholders’ interests. In fact, shareholders at HDBank get “double profits” this year from investing in the bank, as the bank’s ticker rose by 50 per cent since listing and they will receive a 35-per-cent dividend payout soon.
Within the next five years, HDBank plans to develop its customer base through Big Data and trade finance for Vietnam’s supply chain, cementing its strong relationship with major Vietnamese corporations such as Vietjet or Vinamilk.
HDBank aims to triple the number of its customers, reaching 15 million in 2021. Profit growth is expected to reach 37 per cent a year.
Recently, HDBank has released strong results for the first quarter of 2018. In particular, consolidated revenue reached VND1 trillion ($43.8 million), of which HDBank (the parent bank) alone recorded VND851 billion ($37.3 million), up 201.8 per cent year-on-year and reaching 27.5 per cent of the 2018 target. Returns on assets reached 1.5 per cent, while returns on equity stand at 19.2 per cent. The amount of bad debts is under control, standing at only 1.22 per cent.
|HDBank has attracted 48,504 individual customers, 700 corporate customers, up 103 per cent since the end of last year.|
HDBank has attracted 48,504 individual customers, 700 corporate customers, up 103 per cent since the end of last year.
Consumer finance company HD Saison has served 3.9 million customers, up 151.91 per cent year-on-year. Thanks to these results, HD Saison is currently the consumer finance business with the widest network of customers in Vietnam.
According to analysts from Ho Chi Minh City Securities Corporation, consolidated pre-tax profit at HDBank is forecast to reach VND3.95 trillion ($173.2 million) (up 63.79 per cent). Earnings per share stand at VND2,910 ($0.13). These forecasts are based on predictions that the outstanding loan amount at HDBank will reach VND130 trillion ($5.7 billion).
Analysts believe that HDBank and HD Saison will record VND188 trillion ($8.2 billion) and VND11.81 trillion ($517.8 million) of outstanding loans, respectively. Deposits are expected to grow by 20 per cent to reach VND144 trillion ($6.3 billion).
HDBank records one of the strongest growth rates in the entire banking sector and owns a strong consumer finance company. The HDBank ecosystem includes HDBank–HD Saison and Vietjet.
Analysts believe that the parent bank and the consumer finance firm will boost their business results thanks to the good quality of assets, a widened network and commitment towards growth. According to Ho Chi Minh City Securities Corporation, HDBank and Vietcombank are the two listed commercial banks with space for foreign ownership, which will propel the stock price upwards.
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By Nam Phuong