Headline: "Vietcombank to Receive $815 Million from Vietnamese Government"

Vietnam's Deputy Prime Minister Ho Duc Phoc announced on Wednesday a plan to inject 20.695 trillion dong ($815 million) into Vietcombank, the country's largest state-owned commercial bank. This capital increase is intended to enhance the bank's capability to support government policy objectives, including economic restructuring and stability in the banking sector.

This funding aligns with the development strategy for the banking sector until 2025 and ongoing plans for restructuring and resolving bad debts from 2021 to 2025. Phoc emphasized the importance of equipping Vietcombank with sufficient resources to support government policies, manage the restructuring of weaker institutions, and contribute to the overall stability of Vietnam's banking sector and economy.

Additionally, the capital raise is designed to strengthen Vietcombank’s financial position, expand its international presence, and position itself among Asia’s leading banks.

According to LSEG data, the State Bank of Vietnam, which holds a 74.8% stake in Vietcombank, had earlier announced that Vietcombank would be absorbing the smaller Construction Bank as part of its strategy to address non-performing loans.

Phoc detailed that the government's capital injection would be financed using dividends received from Vietcombank in 2018 and the bank's undistributed profits from 2021. The proposal is scheduled to be voted on by Vietnam's parliament on November 30.

Following the announcement, Vietcombank's shares saw a slight increase, closing up 0.11% at 91,500 dong on Wednesday. The bank currently has a market capitalization of $20.2 billion.