According to Minh, under the restructuring plan approved by the central bank, Sacombank will have to make provisions when it generates profit. Therefore, shareholders have two options; first, shareholders can only receive dividends after the bank’s restructuring is complete, and second, they can sell shares when prices edge up.

The proposed bonus payment scheme is aimed at retaining employees as incomes of 18,500 staff are below at other banks. Sacombank staff got an average of VND14 million per month last year, the same as those at Eximbank but below those at MBBank with VND26 million and ACB with VND21 million.

The average monthly income of VND16 million at Sacombank was also lower than that of ACB and MBBank. Since the now-defunct Southern Bank was merged into Sacombank two years ago, 35% of employees have left due to unattractive pay. Sacombank is also losing more people at the moment.

Therefore, bonuses are a vital source of encouragement for employees. If employees do not feel secure, they will quit their jobs, Minh said.

However, a shareholder said the dividend payment plan should be announced in detail as board members will have left after five years. In addition, the Sacombank share price has picked up recently, and shares of other banks have also edged higher. 

Minh said, “If bad debt is not settled well, if profit does not inch up, will the share price rise?”

He said the restructuring of the bank cannot be done in five years. When the bank’s performance improves, Sacombank will ask the central bank for permission to revise the restructuring plan to enhance its finances and pay dividends.

Sacombank said at the general meeting that it had worked hard to settle bad debt and retrieve more than VND19.66 trillion, with VND15.4 trillion of it under the restructuring plan.

However, drastic measures are needed to settle the huge bad debt this year to bring down the bad debt ratio to below 3% from the current 4.59%.

According to Sacombank general director Nguyen Duc Thach Diem, VND15 trillion in bad debt can be settled this year, with bad debt targeted at 3.6% in quarter two, 3.3% in quarter three and below 3% in the final quarter.

Sacombank posted credit growth of 3% in the first quarter with VND232.061 trillion and VND504 billion in pre-tax profit (or 27.7% of the full-year target).