In a new attempt to boost state revenue, the Ministry of Finance has sought the central bank's intervention to collect cash dividends from BIDV and Vietinbank, two of the largest lenders in which the government is a major stakeholder.
In April, the shareholders of BIDV, Vietnam's largest partly-private bank by assets, agreed on distributing stock dividends at a yield of 8.5 percent, compared to the original plan of nearly 10 percent. The second biggest lender Vietinbank's shareholders voted on no dividend payment in either cash or stock. The government now owns over 95 and 64.46 percent of the banks, respectively.
Both the banks said profits from the financial year 2015 should be reinvested into expansion plans, local media reported.
However, in its letter to the central bank, the finance ministry cited existing rules as saying that as a major stakeholder, the government has to be consulted on dividend payout plans.
The central bank should order its representatives at BIDV and Vietinbank to overturn their shareholders' decisions and demand cash dividends be fully paid, according to the ministry.
The proceeds, totally nearly VND5 trillion (US$219.5 million), will be added to the state budget, Tuoi Tre newspaper reported on Wednesday, citing Finance Minister Dinh Tien Dung.
Vietnam's government is still a major shareholder or even the sole owner in many local businesses, including some of the country's largest firms.
The government is expecting total 2015 dividends and profits worth VND55 trillion ($2.41 billion) from these companies.
Speaking to news website Saigon Times Online, an unnamed senior official from the central bank said it will seek the Prime Minister's advice on this matter.
The official said the central bank had earlier allowed BIDV and Vietinbank to retain their net profit, estimated nearly VND11 trillion ($482.85 million) in total, so their capital adequacy ratios are above the legally-required minimum of 9 percent.
Together with eight other major lenders, including Vietcombank and Techcombank, BIDV and Vietinbank are now under pressure to increase their capital to meet the international Basel II standards. The banks started their two-year trial period with the new banking governing standards in February, as ordered by the central bank.
A study by Vietcombank Securities has found that if Basel II norms are applied, Vietnamese banks' capital adequacy ratios will decline by 10-20 percent, while many of them are barely above the minimum requirement with the ratios of 9-10 percent.
The demand was the newest effort to improve the state revenue of the finance ministry, which has anticipated financial struggles amid falling oil prices and lower tariffs.
Vietnam's state revenue posted a year-on-year increase of 1.2 percent to VND317 trillion ($13.91 billion) in the first four months, compared to the rise of 9.4 percent recorded the same period last year, according to the finance ministry's data.