VietinBank sells 50% of the capital of finance leasing companies
On June 22, the Board of Directors of VietinBank (HoSE: CTG) approved the plan to transfer 50% of the capital of Vietnam Leasing Company Limited (VietinBank Leasing) and change the legal form. Specifically, VietinBank will sell 49% of VietinBank Leasing’s capital to Mitsubishi UFJ Lease & Finance and 1% of capital to another domestic investor.
At the same time, the Board of Directors also approved the transfer of the legal form of VietinBank Leasing from one-member limited liability companies to one-member limited liability companies after transferring a part of charter capital.
The Board of Directors has approved a payment and temporary account contract between VietinBank, Mitsubishi UFJ Lease & Finance and Ho Chi Minh City MUFG Bank (a branch of a major shareholder of VietinBank); Agreement on temporary settlement of payment accounts between VietinBank and domestic investors and Indovina Bank Limited (Associated Company of VietinBank).
The Bank will coordinate with the receiving partners to prepare the documents and obtain the approval of the competent authority for the conversion of legal form of VietinBank Leasing.
Mr. Pham Ngoc Long, CEO of VietinBank Leasing. Photo: VietinBank.
According to the 2019 annual report, VietinBank Leasing is 100% owned by VietinBank, operating in the field of financial leasing for businesses, individuals, households, and other organizations that are subject to the loan of CI.
By the end of 2019, total assets of VietinBank Leasing reached VND 3,030 billion, an increase of 6% compared to the beginning of the year. Total income reached VND 274 billion, an increase of 10% compared to 2018, mainly from financial leasing activities reached VND 272 billion, an increase of 33% compared to 2018. Total expenses were VND 152 billion, an increase of 15 % compared to 2018.
Total outstanding loans for financial leasing reached VND 2,778 billion, an increase of 12% compared to 2018. Group 2 debt accounts for 2.7% / total financial leasing loans. NPL ratio accounted for 0.4%. Profit before tax in 2019 of the Company was VND 122 billion, down 7% compared to 2018 mainly due to the increase in cost of capital.
Divesting capital from subsidiaries and associates is one of the options to help VietinBank increase its capital adequacy ratio, in the context of increasing difficulties in charter capital. The bank is submitting a share dividend but it has not been allowed by the authorities.
Last year, the bank divested at Saigonbank, divested part of its capital in VietinBank Jewelry Gold Limited, VietinBank Fund Management One Member Company Limited and is continuing to follow the progress of restructuring the portfolio and subsidiaries.
Besides, the bank also raised Tier 2 capital through issuing bonds. Recently, VietinBank planned to offer VND 11,000 billion of bonds in 2020.
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