VietinBank (CTG) will increase its charter capital this year from 20.2trillion VND (963 million USD) to 30.8 trillion VND (1.4 billion USD),an increase of over 10 trillion VND, chairman Pham Huy Hung told thebank's annual shareholders meeting in Hanoi on Feb. 28.

Many shareholders wondered aloud whether such a substantial increase canbe achieved, with the stock market in difficult circustances.

But Hung said the plan will call for charter capital to rise to 26.2trillion VND immediately from retained earnings on 2011 profits and thesale of shares representing a 9.6-percent interest.

Hungnoted that Vietinbank expects to pay a 16-percent dividend on lastyear's profits, but the amount will be paid in shares, allowing anincrease in treasury shares to be allocated towards charter capital.

Currently, the State holds 80 percent of shares in Vietinbank, whiledomestic and foreign shareholders hold 10 percent and the InternationalFinance Corporation (IFC) the remainder.

Later this year,the bank will sell a 15-percent interest to a foreign strategic investorfor an estimated 4.6 trillion VND (219 million USD), bringing chartercapital to over 30.8 trillion VND (1.46 billion USD). By that time, theState will hold only 68 percent and VietinBank will have two foreignstrategic shareholders.

"To grow effectively will require raising capital to increase the scale of operations," Hung said.

Vietinbank's total assets at the end of 2011 were worth 460 trillionVND (21.9 billion USD), and the bank also planned to increase thisfigure to 550 trillion VND (27 billion USD) this year and 50 billion USDby 2015.

The bank has set a credit growth target in 2012of only 17 percent, down from 23 percent in 2011, Hung said, and it hasbeen in the process of restructuring its investment portfolios in keyState projects, government bonds and construction bonds./.