The gross profit of Sacombank (STB), Vietnam's sixth-largest lender, in the first eight months of this year was nearly double that of the whole of 2006, an executive was quoted on Thursday as saying.
The profit was 900 billion dong ($55.7 million), up from a pre-tax 543 billion dong last year, Sacombank chairman Dang Van Thanh was quoted by the Securities Investment newspaper as telling a company meeting.
Thanh did not give a net profit figure, but said the Ho Chi Minh City-based bank aimed for a full year gross profit of 1.4 trillion dong ($86.6 million).
Sacombank, whose formal name is Saigon Thuong Tin Commercial Bank, has said its seven-month profit more than doubled as loans surged 139 percent from a year earlier to $1.1 billion.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam.
Shares in Sacombank, the first listed bank in the communist ruled country, rose 0.92 percent to 55,000 dong ($3.4) on Thursday.
Sacombank nearly doubled its registered capital to 4.45 trillion dong last month through a share issue as it sought to expand business at home and elsewhere in Asia.
Source: Reuters
Showing posts with label Banking. Show all posts
Showing posts with label Banking. Show all posts
Thursday, September 06, 2007
Tuesday, September 04, 2007
13 joint stock banks waiting to be set up
By the end of August 2007, 13 applications to establish new joint stock banks had been put on the table of the State Bank Governor.
Following the wave of setting up securities companies, the wave of establishing new banks has been kicked off, experts say.
In fact, the race to establish banks started at the same time as the race to establish securities companies, in early 2006. However, in the past year, several tens of new securities companies have been established while no joint bank has been allowed to be established yet.
At the beginning of 2007, the State Bank of Vietnam reportedly received 25 applications to establish new joint stock banks, nearly equal to the number of urban joint stock banks now operational in Vietnam.
However, as the central bank decided to set higher requirements on new banks (the required chartered capital for an urban bank has been raised from VND70bil to VND1tril [$62.5mil]), several banks pulled out, and by the end of August 2007 the number of applications was 13.
The submitted projects all have expected chartered capital higher than the required level: FPT Bank VND1tril ($62.5mil), Lien Viet VND3,300bil ($206.25mil), Viet Tin VND1,680bil ($105mil), Kinh Bac VND1,500bil ($93.75mil). However, experts have pointed out that though having big chartered capital, new banks will still face a lot of challenges.
One of the biggest challenges is the personnel crisis. Though thousands of university students graduate each year, the increasing demand for employees remains unmet, especially demand for high-level, qualified staff.
In addition, banks will face risks in developing networks. As they will focus on retail services, network development is the most important task. Meanwhile, it is very difficult to find locations for setting up transaction offices nowadays. The new stretch of road from Kim Lien to O Cho Dua in Hanoi, which is 900 m long only, has welcomed 8 branches and transaction offices of different banks. There are four bank offices on the first floors of the two adjacent buildings in Trung Hoa-Nhan Chinh new urban area.
Moreover, banks will face a lot of other difficulties in technology, training, corporate governance and advertisement.
Source: VNE
Following the wave of setting up securities companies, the wave of establishing new banks has been kicked off, experts say.
In fact, the race to establish banks started at the same time as the race to establish securities companies, in early 2006. However, in the past year, several tens of new securities companies have been established while no joint bank has been allowed to be established yet.
At the beginning of 2007, the State Bank of Vietnam reportedly received 25 applications to establish new joint stock banks, nearly equal to the number of urban joint stock banks now operational in Vietnam.
However, as the central bank decided to set higher requirements on new banks (the required chartered capital for an urban bank has been raised from VND70bil to VND1tril [$62.5mil]), several banks pulled out, and by the end of August 2007 the number of applications was 13.
The submitted projects all have expected chartered capital higher than the required level: FPT Bank VND1tril ($62.5mil), Lien Viet VND3,300bil ($206.25mil), Viet Tin VND1,680bil ($105mil), Kinh Bac VND1,500bil ($93.75mil). However, experts have pointed out that though having big chartered capital, new banks will still face a lot of challenges.
One of the biggest challenges is the personnel crisis. Though thousands of university students graduate each year, the increasing demand for employees remains unmet, especially demand for high-level, qualified staff.
In addition, banks will face risks in developing networks. As they will focus on retail services, network development is the most important task. Meanwhile, it is very difficult to find locations for setting up transaction offices nowadays. The new stretch of road from Kim Lien to O Cho Dua in Hanoi, which is 900 m long only, has welcomed 8 branches and transaction offices of different banks. There are four bank offices on the first floors of the two adjacent buildings in Trung Hoa-Nhan Chinh new urban area.
Moreover, banks will face a lot of other difficulties in technology, training, corporate governance and advertisement.
Source: VNE
Thursday, August 30, 2007
Sacom to invest $24.7 mln in new bank
Vietnam telecommunications cable maker Sacom (SAM) plans to invest 400 billion dong ($24.7 million) in a 20-percent stake in a start-up bank, its chief executive said on Thursday.
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
REE makes foray into banking, brokerage
Vietnamese engineering firm Refrigeration Electrical Engineering Co. (REE) plans to invest in two start-up banks in Vietnam as it diversifies into financial services, its chief executive said on Thursday.
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Govt gives green light on Vietcombank equitisation
The plan on equitising Vietcombank was approved in principle by the government yesterday, Vietcombank’s leader confirmed this morning, saying that the official decision would be made next week.
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
PM’s decision brings millions of clients to banks
The instruction by the Prime Minister on paying salaries to state officials through bank accounts proves to be good news for banks as banks will have several million more clients.
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
Wednesday, August 29, 2007
Banks continue funding securities investments
While many joint stock banks have announced ceasing loaning to securities investors, other banks are trying to push up this operation, which proves to bring high profit.
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
New banks to be born
The number of applications for establishing new banks now on the table of the Governor of the State Bank of Vietnam has reached 20. The well-informed circle says that the central bank will give answers on the applications in October.
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Tuesday, August 28, 2007
Vietcombank fails to keep IPO timetable
The Vietnam Bank for Foreign Trade (Vietcombank) cannot make IPO prior to August 30 as previously planned as the government has not given the green light on the IPO plan.
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Thursday, August 23, 2007
Vietcombank says H1 2007 profit drops, assets up
Bank for Foreign Trade of Vietnam, the country's third largest, said on Thursday its first-half profit fell 22.7 percent but its assets were up 9.8 percent at 183.4 trillion dong ($11.3 billion) at the end of June.
The six-month net profit was 1.02 trillion dong ($63 million), down from 1.32 trillion dong in the same period last year, the unlisted bank, also known as Vietcombank, told the Ho Chi Minh City exchange in a statement.
Hanoi-based Vietcombank, one of four state-run banks ordered to undergo partial privatisation this year, has said it handles about a quarter of Vietnam's trade payments.
The bank's statement did not give a reason for the lower profit, even though its second-quarter net profit jumped 41.6 percent from a year earlier to 726.3 billion dong. It showed operating costs surged 33 percent during the first six months from a year earlier to 586.64 billion dong.
Vietcombank aims for credit growth of 18 to 20 percent per year over the 2006-2010 period while keeping bad debts at 5-7 percent of loans by 2010.
The bank's seven-year convertible bonds are listed on the Ho Chi Minh Stock Exchange.
Source: Reuters
The six-month net profit was 1.02 trillion dong ($63 million), down from 1.32 trillion dong in the same period last year, the unlisted bank, also known as Vietcombank, told the Ho Chi Minh City exchange in a statement.
Hanoi-based Vietcombank, one of four state-run banks ordered to undergo partial privatisation this year, has said it handles about a quarter of Vietnam's trade payments.
The bank's statement did not give a reason for the lower profit, even though its second-quarter net profit jumped 41.6 percent from a year earlier to 726.3 billion dong. It showed operating costs surged 33 percent during the first six months from a year earlier to 586.64 billion dong.
Vietcombank aims for credit growth of 18 to 20 percent per year over the 2006-2010 period while keeping bad debts at 5-7 percent of loans by 2010.
The bank's seven-year convertible bonds are listed on the Ho Chi Minh Stock Exchange.
Source: Reuters
Wednesday, August 22, 2007
Bank shares prices to bounce back
Bank share prices will recover sooner or later, experts say. However, the prices will not reach previous levels, when the overly hot stock market made shares overvalued.
On the OTC market, bank share prices have been decreasing by 50-60% in the last time compared to the beginning of the year. On the official market, ACB and STB still have not seen any signs of recovery. However, experts assert that bank shares prices will recover, sooner or later.
Don Lam, Director General of VinaCapital, has assured investors by saying that in any case, bank shares will not see further decreases. He said that the price decrease of bank shares in the last three months was inevitable, since prices always go down after a time of escalating.
Director of Dragon Capital Dominic Scriven shared the same view, saying that as bank share prices had been decreasing continuously in the last time it was not likely they would drop further.
Mr Scriven said that banking remained a sector with great potential in Vietnam if compared to other business sectors. Statistics show that the ratio of total credit growth on GDP growth rate is 55% in Vietnam, while the figure is over 400% in the US. To date, only 8% of total population in Vietnam has bank accounts, while the figure is 100% in other countries.
Explaining why bank share prices have been decreasing over the last three months, Mr Scriven said that the profuse supply of ‘commodities’ had made bank shares less attractive. Several banks’ IPOs slated for the third and fourth quarters of the year will certainly lead to the oversupply of bank shares.
Meanwhile, banks now have to cope with a lot of difficulties caused by the high inflation. As the central bank has required higher compulsory reserve ratio for bank deposits, commercial banks now have to pay higher costs for capital mobilisation.
Johan Nyvene, Director of HCM City Securities Company, also thinks that banking remains the good and safe choice for investors. However, he stressed that not all bank share items would recover. Only the banks which have big scale and good business performance will be able to attract investors. He said that investors should learn carefully about banks before deciding to inject money in them, and avoid investments in banks that may be merged with others.
Experts said that a new price level for bank shares would be set up after Vietcombank fulfilled its IPO. However, it remains unclear when Vietcombank’s IPO will take place. It is very likely that the bank’s IPO, previously slated for August, will be delayed due to the falls on the market.
Experts have said that if Vietcombank’s shares are highly valuated, the prices of other bank shares items will bounce back, and vice versa. Investors, both foreign and domestic, institutions and individuals, have gathered big sums of money to inject in Vietcombank shares when the bank’s shares hit the market.
Source: VNE
On the OTC market, bank share prices have been decreasing by 50-60% in the last time compared to the beginning of the year. On the official market, ACB and STB still have not seen any signs of recovery. However, experts assert that bank shares prices will recover, sooner or later.
Don Lam, Director General of VinaCapital, has assured investors by saying that in any case, bank shares will not see further decreases. He said that the price decrease of bank shares in the last three months was inevitable, since prices always go down after a time of escalating.
Director of Dragon Capital Dominic Scriven shared the same view, saying that as bank share prices had been decreasing continuously in the last time it was not likely they would drop further.
Mr Scriven said that banking remained a sector with great potential in Vietnam if compared to other business sectors. Statistics show that the ratio of total credit growth on GDP growth rate is 55% in Vietnam, while the figure is over 400% in the US. To date, only 8% of total population in Vietnam has bank accounts, while the figure is 100% in other countries.
Explaining why bank share prices have been decreasing over the last three months, Mr Scriven said that the profuse supply of ‘commodities’ had made bank shares less attractive. Several banks’ IPOs slated for the third and fourth quarters of the year will certainly lead to the oversupply of bank shares.
Meanwhile, banks now have to cope with a lot of difficulties caused by the high inflation. As the central bank has required higher compulsory reserve ratio for bank deposits, commercial banks now have to pay higher costs for capital mobilisation.
Johan Nyvene, Director of HCM City Securities Company, also thinks that banking remains the good and safe choice for investors. However, he stressed that not all bank share items would recover. Only the banks which have big scale and good business performance will be able to attract investors. He said that investors should learn carefully about banks before deciding to inject money in them, and avoid investments in banks that may be merged with others.
Experts said that a new price level for bank shares would be set up after Vietcombank fulfilled its IPO. However, it remains unclear when Vietcombank’s IPO will take place. It is very likely that the bank’s IPO, previously slated for August, will be delayed due to the falls on the market.
Experts have said that if Vietcombank’s shares are highly valuated, the prices of other bank shares items will bounce back, and vice versa. Investors, both foreign and domestic, institutions and individuals, have gathered big sums of money to inject in Vietcombank shares when the bank’s shares hit the market.
Source: VNE
Thursday, August 16, 2007
SBV fights inflation, commercial banks’ wings clipped
In order to curb inflation, the central bank has to apply several urgent measures. However, the measures, while helping the central bank hit the mark, have been creating big difficulties for commercial banks.
Since July 30, 2007, the State Bank of Vietnam has three times raised the required compulsory reserve ratio for bank deposits. The ratio for demand deposits and less-than-12-month deposits has been raised from 2% to 5% and then to 10% of total deposits.
Experts say that it is actually necessary to raise the compulsory reserve ratio in the context of the ‘hot credit growth’ in the first six months of the year (15% over the end of 2006). However, they said that the central bank made an unsuitable move when raising the compulsory reserve ratio dramatically by two fold, which is believed will influence the liquidity of the national economy.
According to the Vietnam Industrial and Commercial Bank (Incombank), the higher required compulsory reserve ratio means that the capital cost will be higher, which will force the banks either to lower capital mobilisation interest rates, or raise lending interest rates.
As commercial banks now have to compete with each other fiercely, they will find it hard to demand higher lending interest rates from their traditional clients. If they insist on raising lending interest rates, they will see their market shares narrow or they will have to accept loans with higher risks. In previous years, the demand for capital always increased in the third quarter, and if the scenario repeats this year, banks may have to raise the interest rates on deposits and lending interest rates.
Several commercial banks have asked the central bank to consider re-adjusting the required compulsory ratio. The banks said that the high compulsory ratio had caused big difficulties for their operations, while enterprises said that the decision had weakened their competitiveness, since enterprises still rely on bank loans as their biggest source of working capital.
The State Bank of Vietnam has also announced it will tighten loans for consumer, real estate projects and securities investments.
However, experts have warned that if the central bank tries to keep a rein on loaning to real estate investors, it will freeze the real estate market for longer, which would hinder the synchronous development of key markets in Vietnam.
In fact, loans funding consumer projects remain modest, accounting for 5-20% of total outstanding loans of banks; therefore, there is no need to strictly control lending for consumer projects.
If considering investment portfolio and credit quality, one can see that banks should tighten lending to state-owned enterprises instead of lending for consumer or real estate projects. Statistics show that state-owned enterprises have a high ratio of bad debts: the ratio of debts on state capital in these enterprises is 5 on average, and reach 30-35 in some enterprises.
Source: VNE
Since July 30, 2007, the State Bank of Vietnam has three times raised the required compulsory reserve ratio for bank deposits. The ratio for demand deposits and less-than-12-month deposits has been raised from 2% to 5% and then to 10% of total deposits.
Experts say that it is actually necessary to raise the compulsory reserve ratio in the context of the ‘hot credit growth’ in the first six months of the year (15% over the end of 2006). However, they said that the central bank made an unsuitable move when raising the compulsory reserve ratio dramatically by two fold, which is believed will influence the liquidity of the national economy.
According to the Vietnam Industrial and Commercial Bank (Incombank), the higher required compulsory reserve ratio means that the capital cost will be higher, which will force the banks either to lower capital mobilisation interest rates, or raise lending interest rates.
As commercial banks now have to compete with each other fiercely, they will find it hard to demand higher lending interest rates from their traditional clients. If they insist on raising lending interest rates, they will see their market shares narrow or they will have to accept loans with higher risks. In previous years, the demand for capital always increased in the third quarter, and if the scenario repeats this year, banks may have to raise the interest rates on deposits and lending interest rates.
Several commercial banks have asked the central bank to consider re-adjusting the required compulsory ratio. The banks said that the high compulsory ratio had caused big difficulties for their operations, while enterprises said that the decision had weakened their competitiveness, since enterprises still rely on bank loans as their biggest source of working capital.
The State Bank of Vietnam has also announced it will tighten loans for consumer, real estate projects and securities investments.
However, experts have warned that if the central bank tries to keep a rein on loaning to real estate investors, it will freeze the real estate market for longer, which would hinder the synchronous development of key markets in Vietnam.
In fact, loans funding consumer projects remain modest, accounting for 5-20% of total outstanding loans of banks; therefore, there is no need to strictly control lending for consumer projects.
If considering investment portfolio and credit quality, one can see that banks should tighten lending to state-owned enterprises instead of lending for consumer or real estate projects. Statistics show that state-owned enterprises have a high ratio of bad debts: the ratio of debts on state capital in these enterprises is 5 on average, and reach 30-35 in some enterprises.
Source: VNE
ACB has a strong growth in Jan-July
Asia Commercial Bank (ACB), Vietnam's fifth largest, said on Thursday it made a gross profit of 1 trillion dong ($61.8 million) in the first seven months of this year compared with $42 million for all of 2006.
The Ho Chi Minh City-based bank also said in a statement its assets had jumped 40 percent to 62.52 trillion dong ($3.86 billion) between the end of 2006 and July 31.
ACB, which expects a 2007 gross profit of 1.5 trillion dong, did not give net profit or comparative year-ago figures for the January-July period.
It said deposits reached 56.35 trillion dong ($3.48 billion) in the first seven months, more than twice its loans in the same period, which amounted to 23.54 trillion dong.
The Hanoi-listed bank said last month that new lines of business, including gold trading and new mortgage products, had contributed to better results since the start of the year.
Shares in ACB rose 700 dong, or 0.6 percent, to close at 118,000 dong ($7.29) on the over-the-counter Hanoi stock market on Wednesday.
ACB is aiming for growth of 45 percent to 50 percent in the 2006-2010 period and to have assets of about $12 billion by the end of it.
Last month, the central bank allowed ACB to sell long-term bonds worth 6.5 trillion dong ($402 million) by the end of the year.
Demand for loans and other banking services is booming as Vietnam's economy expands rapidly. Gross domestic product grew an estimated 7.87 percent in the first half of 2007 from a year earlier, led by the industrial and construction sectors.
Four foreign shareholders have a combined 30 percent in ACB, of which Standard Chartered Plc. has the largest stake of 8.56 percent.
Source: Reuters
The Ho Chi Minh City-based bank also said in a statement its assets had jumped 40 percent to 62.52 trillion dong ($3.86 billion) between the end of 2006 and July 31.
ACB, which expects a 2007 gross profit of 1.5 trillion dong, did not give net profit or comparative year-ago figures for the January-July period.
It said deposits reached 56.35 trillion dong ($3.48 billion) in the first seven months, more than twice its loans in the same period, which amounted to 23.54 trillion dong.
The Hanoi-listed bank said last month that new lines of business, including gold trading and new mortgage products, had contributed to better results since the start of the year.
Shares in ACB rose 700 dong, or 0.6 percent, to close at 118,000 dong ($7.29) on the over-the-counter Hanoi stock market on Wednesday.
ACB is aiming for growth of 45 percent to 50 percent in the 2006-2010 period and to have assets of about $12 billion by the end of it.
Last month, the central bank allowed ACB to sell long-term bonds worth 6.5 trillion dong ($402 million) by the end of the year.
Demand for loans and other banking services is booming as Vietnam's economy expands rapidly. Gross domestic product grew an estimated 7.87 percent in the first half of 2007 from a year earlier, led by the industrial and construction sectors.
Four foreign shareholders have a combined 30 percent in ACB, of which Standard Chartered Plc. has the largest stake of 8.56 percent.
Source: Reuters
Tuesday, August 14, 2007
Banks tighten securities investment funding
Banks have begun taking action to tighten the funding of securities investment deals in order to bring their outstanding loans to stock investors to below 3% of total outstanding loans as the central bank has required.
The Director of the Saigon Housing Development Bank at the end of June 2007 released a decision to stop funding securities investments immediately. The bank has also stopped the disbursement of the loans which had been approved by bank leaders. The director asked his staffs to re-assess the securities market value, and asked borrowers to reduce the outstanding loans or provide more mortgaged assets.
The Military Bank still opens its doors to securities investors, but the bank now only provides loans to clients who have accounts at securities companies with whom the bank has cooperation agreements.
Meanwhile, state-owned banks, which have outstanding loans for securities investments at low levels so far, below 2%, seem to not intend to expand credit to securities investors, though they still could do that.
Le Dao Nguyen, Deputy Director General of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV did not intend to provide loans to fund securities trading deals.
According to AC Nielsen, a market research company, only 0.26% of Vietnam’s population participates in the stock market. By June 29, the number of accounts opened at securities companies had reached 200,000, including 5,000 ones owned by foreign institutions and investors. The figure proves to be very ‘modest’ if compared to the high population. It is estimated that 55 investment funds are present in Vietnam, which have brought a huge sum of money worth $6bil.
The State Bank of Vietnam on August 9 released a document urging banks to collect debts to lower the outstanding loans given for securities investments. Commercial banks have six months more to do that. This showed the central bank’s determination to put a cap on loaning for securities investments, despite protests from commercial banks.
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that in the world only India limited its banks’ outstanding loans for securities investments at below 5%, while other countries allowed commercial banks to decide themselves how much to loan.
However, the central banks in these countries have good information systems, which allow them to initiate decisions in every bank quickly.
“The principle we follow is trying to limit loans for securities investments, but not cause big difficulties for banks and avoid sudden changes to the market,” Mr Nghia said.
Le Dac Son, Director General of VP Bank, said that in Vietnam, a fledgling market, it was necessary to control the loaning for securities investments. However, he said that it would be more appropriate to raise the cap from 3% of total outstanding loans to 5%-6%.
Source: VNS
The Director of the Saigon Housing Development Bank at the end of June 2007 released a decision to stop funding securities investments immediately. The bank has also stopped the disbursement of the loans which had been approved by bank leaders. The director asked his staffs to re-assess the securities market value, and asked borrowers to reduce the outstanding loans or provide more mortgaged assets.
The Military Bank still opens its doors to securities investors, but the bank now only provides loans to clients who have accounts at securities companies with whom the bank has cooperation agreements.
Meanwhile, state-owned banks, which have outstanding loans for securities investments at low levels so far, below 2%, seem to not intend to expand credit to securities investors, though they still could do that.
Le Dao Nguyen, Deputy Director General of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV did not intend to provide loans to fund securities trading deals.
According to AC Nielsen, a market research company, only 0.26% of Vietnam’s population participates in the stock market. By June 29, the number of accounts opened at securities companies had reached 200,000, including 5,000 ones owned by foreign institutions and investors. The figure proves to be very ‘modest’ if compared to the high population. It is estimated that 55 investment funds are present in Vietnam, which have brought a huge sum of money worth $6bil.
The State Bank of Vietnam on August 9 released a document urging banks to collect debts to lower the outstanding loans given for securities investments. Commercial banks have six months more to do that. This showed the central bank’s determination to put a cap on loaning for securities investments, despite protests from commercial banks.
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that in the world only India limited its banks’ outstanding loans for securities investments at below 5%, while other countries allowed commercial banks to decide themselves how much to loan.
However, the central banks in these countries have good information systems, which allow them to initiate decisions in every bank quickly.
“The principle we follow is trying to limit loans for securities investments, but not cause big difficulties for banks and avoid sudden changes to the market,” Mr Nghia said.
Le Dac Son, Director General of VP Bank, said that in Vietnam, a fledgling market, it was necessary to control the loaning for securities investments. However, he said that it would be more appropriate to raise the cap from 3% of total outstanding loans to 5%-6%.
Source: VNS
Monday, August 13, 2007
Challenges await new State Bank governor
A lot of works and challenges are awaiting Mr Nguyen Van Giau, who has taken office as the new State Bank of Vietnam governor.
Vietnam’s banking system is welcoming the new leader, who is expected to carry out reform so that the banking system, the heart of the national economy, can have a stable and healthy rhythm. Mr Giau will have to deal with a lot of problems in his term as governor of the central bank.
The first task is to curb the inflation. Prices are escalating again after a long time of being restrained, partially because of the cost push and demand pull.
In the first seven months of the year, the inflation rate climbed to 6.19%, which foreshadows that the inflation rate for 2007 will not be less than 8%, threatening to push the CPI growth rate in 2007 to a record height in the last five years.
The most noteworthy thing is that the inflation rate keeps high when the excess of imports over exports remains high ($5.45bil, or 21% of total export turnover in the first 7 months of the year), which shows that the price imbalance cannot be settled by the excess of imports.
The exchange rate of the local currency, VND, against the greenback and other hard foreign currencies also needs to be set based on a suitable policy which aims to encourage exports, while it must not become a factor leading to high inflation.
In the current situation, when foreign portfolio investment is increasing sharply, the plan to make the local currency into a convertible currency needs thorough consideration. A convertible VND which revaluates precariously is not a good sign. This may foretell possible financial fluctuations (on the stock market), or monetary fluctuations (reduction in national foreign currency reserve), and foreign trade (reduction in exports) as well.
However, the short-term problems can be settled if suitable solutions can be found, and the existing problems can be tackled fundamentally. First of all, Vietnam needs a central bank which operates in the true sense of the word.
In fact, international institutions including the International Monetary Fund (IMF) and the World Bank (WB) all have suggested a more active role of the State Bank of Vietnam in building up and regulating the monetary policy, and taking responsibility for the implementation of the monetary policy, aiming to fulfill the economic targets set by the National Assembly and the government.
A healthy competitive business environment, an equal playing field is the thing commercial banks need, because this is the core factor for the development of the domestic banking system. It is necessary to have a new model for the central bank, and it is necessary to have a new legal framework for the new model. Amending the State Bank Law and Credit Institution Law should be the priority works in the action programme of the new governor.
Supervision and inspection over companies operating in the fields of securities, banking and insurance will be a big problem to deal with. To date, this work has been undertaken by three state management bodies. Experts have asked for the establishment of an organ which can gather the strength and power of the three bodies and take responsibility for the supervision and inspection work.
If the proposal is accepted, the central bank will escape from this work, thus having more time to focus on the monetary policy. This may be an important decision that the governor will consider in his term.
Returning to monetary issues, the new governor will have to deal with the so-called “cash economy”. It has taken a lot of money and time to deal with the problem, but no considerable improvement has been made.
Commercial banks nowadays are trying to expand their ATM networks, but the network only can show its effectiveness in a non-cash economy. In fact, Vietnamese people even use dollars and gold to make payments for their big transactions. The payment in cash makes the expenses of the national economy increasingly high. An economist said that Vietnam’s cash economy had created a barrier to the absorbability of foreign investment flows.
Credit quality will also be one of the pressing issues for the coming time. This will depend on the professionalism of banks, good risk management process, good operation of enterprises and suitable policies.
Source: VNE
Vietnam’s banking system is welcoming the new leader, who is expected to carry out reform so that the banking system, the heart of the national economy, can have a stable and healthy rhythm. Mr Giau will have to deal with a lot of problems in his term as governor of the central bank.
The first task is to curb the inflation. Prices are escalating again after a long time of being restrained, partially because of the cost push and demand pull.
In the first seven months of the year, the inflation rate climbed to 6.19%, which foreshadows that the inflation rate for 2007 will not be less than 8%, threatening to push the CPI growth rate in 2007 to a record height in the last five years.
The most noteworthy thing is that the inflation rate keeps high when the excess of imports over exports remains high ($5.45bil, or 21% of total export turnover in the first 7 months of the year), which shows that the price imbalance cannot be settled by the excess of imports.
The exchange rate of the local currency, VND, against the greenback and other hard foreign currencies also needs to be set based on a suitable policy which aims to encourage exports, while it must not become a factor leading to high inflation.
In the current situation, when foreign portfolio investment is increasing sharply, the plan to make the local currency into a convertible currency needs thorough consideration. A convertible VND which revaluates precariously is not a good sign. This may foretell possible financial fluctuations (on the stock market), or monetary fluctuations (reduction in national foreign currency reserve), and foreign trade (reduction in exports) as well.
However, the short-term problems can be settled if suitable solutions can be found, and the existing problems can be tackled fundamentally. First of all, Vietnam needs a central bank which operates in the true sense of the word.
In fact, international institutions including the International Monetary Fund (IMF) and the World Bank (WB) all have suggested a more active role of the State Bank of Vietnam in building up and regulating the monetary policy, and taking responsibility for the implementation of the monetary policy, aiming to fulfill the economic targets set by the National Assembly and the government.
A healthy competitive business environment, an equal playing field is the thing commercial banks need, because this is the core factor for the development of the domestic banking system. It is necessary to have a new model for the central bank, and it is necessary to have a new legal framework for the new model. Amending the State Bank Law and Credit Institution Law should be the priority works in the action programme of the new governor.
Supervision and inspection over companies operating in the fields of securities, banking and insurance will be a big problem to deal with. To date, this work has been undertaken by three state management bodies. Experts have asked for the establishment of an organ which can gather the strength and power of the three bodies and take responsibility for the supervision and inspection work.
If the proposal is accepted, the central bank will escape from this work, thus having more time to focus on the monetary policy. This may be an important decision that the governor will consider in his term.
Returning to monetary issues, the new governor will have to deal with the so-called “cash economy”. It has taken a lot of money and time to deal with the problem, but no considerable improvement has been made.
Commercial banks nowadays are trying to expand their ATM networks, but the network only can show its effectiveness in a non-cash economy. In fact, Vietnamese people even use dollars and gold to make payments for their big transactions. The payment in cash makes the expenses of the national economy increasingly high. An economist said that Vietnam’s cash economy had created a barrier to the absorbability of foreign investment flows.
Credit quality will also be one of the pressing issues for the coming time. This will depend on the professionalism of banks, good risk management process, good operation of enterprises and suitable policies.
Source: VNE
Incombank issues CDs to raise $200 mln
State-run Vietnam Industrial and Commercial Bank (Incombank), the country's fourth-largest lender by assets, said on Monday it would raise $200 million through issuing dollar-denominated certificates of deposit (CD).
The Hanoi-based unlisted Incombank said it began issuing the CDs to Vietnamese investors and foreign investors residing in the country over a two-month period last week.
The bank did not say what it would use the proceeds for.
It offered to pay 5.3 percent interest on 12-month dollar-denominated certificates, 5.4 percent for 18-month deposits and 5.5 percent for the 24-month CDs, following approval from the central bank.
Incombank's assets at the end of June rose 12 percent from the end of 2006 to 155 trillion dong ($9.6 billion).
The central bank had said it would take more dong out of the economy in the coming months through open market transactions to curb inflation, which accelerated in July to 8.39 percent from a year earlier.
Source: ReutersFriday, August 10, 2007
Banks rushing to issue bonds
In July 2007 alone, the total value of bonds issued by commercial banks reached VND21,500bil, including the VND3tril worth of bonds issued by the Bank for Investment and Development of Vietnam (BIDV).
Banks are seemingly rushing to issue bonds at this moment, and analysts say that this is the result of the decision by the central bank in May to require higher compulsory reserve ratio on bank deposits. The decision has certainly led to the higher cost of capital mobilisation, which explains why banks have to find another way to mobilise capital. Issuing bonds proves to be a good solution, because banks do not have to make compulsory reserves for the capital raised from bond issuances as they have to do for the capital raised from bank deposits.
Commercial banks are ready to pay high interest rates for the bonds in order to attract more buyers. In the long term, the interest rates for deposits are expected to increase gradually, thus making the high interest rates banks have to pay at this moment cheaper.
Banks are rushing to issue bonds also because the issuances may help raise their total assets. Big total assets can satisfy shareholders of banks while attracting more clients.
However, the problem lies in the fact that banks are still trying to raise more funds though their usable capital remains profuse. The financial reports of several banks show that the mobilised capital has increased sharply in the last time, while outstanding loans have not increased accordingly. Last month BIDV issued VND3tril worth of bonds. Though the bank has not declared detailed figures, sources said that the buyers of the bonds were mainly other commercial banks.
Some analysts think that banks are trying to issue bonds because they want more long-term capital. Currently, the banking system is the biggest lender. The stock market is still in its first stage of development, and only few enterprises can access this capital source. Only a few enterprises have raised funds by issuing bonds, including the HCM City Infrastructure Investment (CII), which issued VND500bil worth of bonds last month with the guarantee of VIB Bank and VISecurities. There are many reasons behind the underdevelopment of the bond market, but the biggest reason, according to Dang Doan Kien, Director General of VISecurities, is that Vietnam still lacks credit rating firms, which can release credit ratings of enterprises as bond issuers.
In fact, the move by banks to issue bonds in the last time has been encouraged by the State Bank of Vietnam and the Ministry of Finance. On August 1, Deputy Prime Minister Nguyen Sinh Hung signed a document, requesting relevant ministries to join forces to control inflation. The central bank has been asked to check monetary policies, control payment instruments, and urged to use open market tools in order to limit the supply of cash. Therefore, bond issuance, which helps withdraw cash from circulation, has been backed by the central bank.
Sources said that several other banks were seeking permission to issue bonds and the proposals would be accepted.
Despite a lot of efforts, the consumer price index (CPI) jumped high in the first seven months of the year to 6.19%, higher than last year’s same period level of 4.4%. Controlling inflation is the most important task for the remaining months of the year. However, analysts have warned that it will be very difficult to obtain the goal at the same time as stabilising the exchange rate to encourage exports. International economics has the theory of the ‘impossible trinity’, which means three things cannot be obtained at the same time: free capital movement, a fixed exchange rate, and an independent monetary policy.
Source: VNE
Banks are seemingly rushing to issue bonds at this moment, and analysts say that this is the result of the decision by the central bank in May to require higher compulsory reserve ratio on bank deposits. The decision has certainly led to the higher cost of capital mobilisation, which explains why banks have to find another way to mobilise capital. Issuing bonds proves to be a good solution, because banks do not have to make compulsory reserves for the capital raised from bond issuances as they have to do for the capital raised from bank deposits.
Commercial banks are ready to pay high interest rates for the bonds in order to attract more buyers. In the long term, the interest rates for deposits are expected to increase gradually, thus making the high interest rates banks have to pay at this moment cheaper.
Banks are rushing to issue bonds also because the issuances may help raise their total assets. Big total assets can satisfy shareholders of banks while attracting more clients.
However, the problem lies in the fact that banks are still trying to raise more funds though their usable capital remains profuse. The financial reports of several banks show that the mobilised capital has increased sharply in the last time, while outstanding loans have not increased accordingly. Last month BIDV issued VND3tril worth of bonds. Though the bank has not declared detailed figures, sources said that the buyers of the bonds were mainly other commercial banks.
Some analysts think that banks are trying to issue bonds because they want more long-term capital. Currently, the banking system is the biggest lender. The stock market is still in its first stage of development, and only few enterprises can access this capital source. Only a few enterprises have raised funds by issuing bonds, including the HCM City Infrastructure Investment (CII), which issued VND500bil worth of bonds last month with the guarantee of VIB Bank and VISecurities. There are many reasons behind the underdevelopment of the bond market, but the biggest reason, according to Dang Doan Kien, Director General of VISecurities, is that Vietnam still lacks credit rating firms, which can release credit ratings of enterprises as bond issuers.
In fact, the move by banks to issue bonds in the last time has been encouraged by the State Bank of Vietnam and the Ministry of Finance. On August 1, Deputy Prime Minister Nguyen Sinh Hung signed a document, requesting relevant ministries to join forces to control inflation. The central bank has been asked to check monetary policies, control payment instruments, and urged to use open market tools in order to limit the supply of cash. Therefore, bond issuance, which helps withdraw cash from circulation, has been backed by the central bank.
Sources said that several other banks were seeking permission to issue bonds and the proposals would be accepted.
Despite a lot of efforts, the consumer price index (CPI) jumped high in the first seven months of the year to 6.19%, higher than last year’s same period level of 4.4%. Controlling inflation is the most important task for the remaining months of the year. However, analysts have warned that it will be very difficult to obtain the goal at the same time as stabilising the exchange rate to encourage exports. International economics has the theory of the ‘impossible trinity’, which means three things cannot be obtained at the same time: free capital movement, a fixed exchange rate, and an independent monetary policy.
Source: VNE
Thursday, August 09, 2007
Techcombank says assets jump 43 pct
Technological and Commercial Bank, Vietnam's seventh largest, said on Thursday its assets were 43 percent higher at the end of July than at the end of 2006 at 25 trillion dong ($1.5 billion) as loans grew 41 percent.
The unlisted Hanoi-based bank, 15 percent owned by HSBC Holdings Plc., said in a statement it had a gross profit of 364 billion dong ($22.5 million) in the first seven months of this year.
The lender, also known as Techcombank, said loans grew to 12.43 trillion dong ($769 million) but did not give a net profit or a comparative figure for the same period last year.
Techcombank's gross profit in the first seven months of this year is already higher than its pre-tax earnings for the whole of 2006, which rose 24.7 percent from 2005 to 357 billion dong.
Deposits in the first seven months rose 49 percent from the end of last year to 22.58 trillion dong ($1.4 billion).
Last month, the central bank gave Techcombank permission to raise 4 trillion dong ($248 million) in a domestic bond issue this year.
Source: Reuters
The unlisted Hanoi-based bank, 15 percent owned by HSBC Holdings Plc., said in a statement it had a gross profit of 364 billion dong ($22.5 million) in the first seven months of this year.
The lender, also known as Techcombank, said loans grew to 12.43 trillion dong ($769 million) but did not give a net profit or a comparative figure for the same period last year.
Techcombank's gross profit in the first seven months of this year is already higher than its pre-tax earnings for the whole of 2006, which rose 24.7 percent from 2005 to 357 billion dong.
Deposits in the first seven months rose 49 percent from the end of last year to 22.58 trillion dong ($1.4 billion).
Last month, the central bank gave Techcombank permission to raise 4 trillion dong ($248 million) in a domestic bond issue this year.
Source: Reuters
Wednesday, August 08, 2007
What’s behind the Eximbank-SMBC hand shaking?
In early August 2007, breaking news was announced: Eximbank had chosen Japanese Sumitomo Mitsui Banking Corporation (SMBC), one of the leading banks in the world, as its strategic partner. There are many more things that can be said about the cooperation.
The announcement about the cooperation between Vietnam’s Eximbank and Japan’s Sumitomo Mitsui was the fully satisfactory result of the quiet negotiations between the two sides.
It is clear that Eximbank has made a good deal, since Japanese banks are well known for their cautiousness and conservatism, always taking skeptical steps in doing business, and having perfect risk management skills. Japan is the country with the biggest number of banks in the world. This is the first time a Japanese bank has bought shares of a Vietnamese bank.
If comparing the Eximbank-SMBC deal with the deals of selling shares by other Vietnamese banks to foreign partners, one should see that the selling price of Eximbank proves to be the highest and most beneficial to the local bank in the context of share price slides and decreasing VN Index.
The deal of selling 15% of shares to the Japanese partner can bring Eximbank the huge sum of money of $225mil. The issuance price was 6.42 times higher than the share face value, and 10% lower than the market price at the issuance moment.
Money is not the only thing SMBC can bring to Eximbank. The Japanese bank will also bring support in technologies, and bank governance. In order to bring the support, SMBC will assign a representative to Eximbank, who will join the bank’s management board.
The move by Eximbank of choosing a leading Japanese bank as a strategic shareholder has been highly praised by other local banks, as it was a double move.
The move will allow Eximbank to improve its financial capability and upgrade its management skills. Moreover, it will help the bank better satisfy clients, and Vietnamese enterprises which do business and have relations with Japanese partners. Every one knows that Japan is one of Vietnam’s leading export markets, and one of its biggest trade, investment and tourism partners.
At this moment, Eximbank is also nearly wrapping up the deal on selling 10% of its shares to two foreign investment funds. The said deals would help Eximbank raise its chartered capital from VND2,800bil ($175mil) to VND3,733bil ($233.31mil) in 2007.
The capital surplus Eximbank can get after selling shares to foreign partners may reach VND5,600bil ($350mil). If counting the capital surplus the bank got when selling shares to 17 local partners, estimated at VND3,500bil ($218.75mil), Eximbank would get more than VND9tril ($568mil), enough to become the joint stock bank which has the biggest ownership capital and the bank which has the second biggest chartered capital in Vietnam.
It is expected that in 2008-2010, Eximbank will give dividends to shareholders and divide the fund of capital surplus with the minimum proportion of 35% per annum. By 2010, Eximbank’s chartered capital will reach VND13tril ($812.5mil) at minimum, the level that other banks will find it hard to reach.
With the big ownership and chartered capital, Eximbank will be able to follow its strategy on modernising technologies and initiating other investment plans.
More than one month ago, on June 20, 2007, Eximbank announced it reached an agreement to sell VND500bil of chartered capital to 17 domestic strategic shareholders, which are big economic groups. The selling price was 8-fold higher than the face value, worth VND4tril ($250mil).
The 17 strategic shareholders included big names like Generalexim 1, Asia Commercial Bank, Kinh Do Group and Saigon Trading Corporation.
The said move has also been praised by analysts: while other joint stock banks just have one or two domestic partners, Eximbank has chosen 17 big ones.
Source: VNE
The announcement about the cooperation between Vietnam’s Eximbank and Japan’s Sumitomo Mitsui was the fully satisfactory result of the quiet negotiations between the two sides.
It is clear that Eximbank has made a good deal, since Japanese banks are well known for their cautiousness and conservatism, always taking skeptical steps in doing business, and having perfect risk management skills. Japan is the country with the biggest number of banks in the world. This is the first time a Japanese bank has bought shares of a Vietnamese bank.
If comparing the Eximbank-SMBC deal with the deals of selling shares by other Vietnamese banks to foreign partners, one should see that the selling price of Eximbank proves to be the highest and most beneficial to the local bank in the context of share price slides and decreasing VN Index.
The deal of selling 15% of shares to the Japanese partner can bring Eximbank the huge sum of money of $225mil. The issuance price was 6.42 times higher than the share face value, and 10% lower than the market price at the issuance moment.
Money is not the only thing SMBC can bring to Eximbank. The Japanese bank will also bring support in technologies, and bank governance. In order to bring the support, SMBC will assign a representative to Eximbank, who will join the bank’s management board.
The move by Eximbank of choosing a leading Japanese bank as a strategic shareholder has been highly praised by other local banks, as it was a double move.
The move will allow Eximbank to improve its financial capability and upgrade its management skills. Moreover, it will help the bank better satisfy clients, and Vietnamese enterprises which do business and have relations with Japanese partners. Every one knows that Japan is one of Vietnam’s leading export markets, and one of its biggest trade, investment and tourism partners.
At this moment, Eximbank is also nearly wrapping up the deal on selling 10% of its shares to two foreign investment funds. The said deals would help Eximbank raise its chartered capital from VND2,800bil ($175mil) to VND3,733bil ($233.31mil) in 2007.
The capital surplus Eximbank can get after selling shares to foreign partners may reach VND5,600bil ($350mil). If counting the capital surplus the bank got when selling shares to 17 local partners, estimated at VND3,500bil ($218.75mil), Eximbank would get more than VND9tril ($568mil), enough to become the joint stock bank which has the biggest ownership capital and the bank which has the second biggest chartered capital in Vietnam.
It is expected that in 2008-2010, Eximbank will give dividends to shareholders and divide the fund of capital surplus with the minimum proportion of 35% per annum. By 2010, Eximbank’s chartered capital will reach VND13tril ($812.5mil) at minimum, the level that other banks will find it hard to reach.
With the big ownership and chartered capital, Eximbank will be able to follow its strategy on modernising technologies and initiating other investment plans.
More than one month ago, on June 20, 2007, Eximbank announced it reached an agreement to sell VND500bil of chartered capital to 17 domestic strategic shareholders, which are big economic groups. The selling price was 8-fold higher than the face value, worth VND4tril ($250mil).
The 17 strategic shareholders included big names like Generalexim 1, Asia Commercial Bank, Kinh Do Group and Saigon Trading Corporation.
The said move has also been praised by analysts: while other joint stock banks just have one or two domestic partners, Eximbank has chosen 17 big ones.
Source: VNE
Tuesday, August 07, 2007
Banks focus on services to improve competitiveness
Vietnam’s commercial banks have given top priority to the development of services in an effort to sharpen their competitive edge.
In line with this, many banks in collaboration with their own partners have introduced their typical services based on advantages in customers, trading network and modern technology.
Experts said cooperating with potential partners is an appropriate way for domestic banks’ development and the method is considered to be better than concentrating only on savings mobilisation, lending, card issuance and trade finance that are strong points of foreign banks.
Recently, the Vietnam Export Import Commercial Joint Stock Bank (Vietnam Eximbank) signed agreements with 16 strategic partners through which the bank can develop services such as money collection, payment, co-signed loan provision, project finance and card issuance.
The strategic partners include the Bien Viet Securities Company, the Saigon Trade Corporation, the PetroVietnam Finance Company, the Saigon Post and Telecommunications Service Corporation and the Kinh Do Group.
The Technological and Commercial Joint Stock Bank (Techcombank) has signed a series of cooperation agreements with local corporations to offer different modes of payment services. For example, is has joined hands with the Corporation for Financing and Promoting Technology (FPT) to supply payment services for Internet ADSL fees.
It also works with the VTC Intecom to supply mobile phone banking services, allowing handset users to make payments for games and goods by sending short messages to the bank after opening an account, and cooperates with the Ho Chi Minh City Insurance Corporation to provide insurance payment services.
Earlier, Techcombank has become the first financial institution in Vietnam to introduce the Internet Banking to the market, enabling the bank's clients to make transactions and check accounts via the Internet.
Meanwhile, the Vietnam Joint Stock Commercial Bank for Private Enterprises (VP Bank) has improved its competitive edge by entering an ATM card alliance with 18 other local commercial banks, which is presided over by the Bank for Foreign Trade of Vietnam (Vietcombank). Accounting for more than 70 percent of the market share, this card alliance is considered the most effective model among the four alliances currently operating in Vietnam.
For its part, the East Asia Bank - the leading card provider in Vietnam - has launched payment services for electricity and running water through its ATM system or branches in Ho Chi Minh City and southern Binh Duong province.
Other commercial banks like the Saigon Thuong Tin Commercial Bank (Sacombank), the An Binh Commercial Bank (AB Bank), the Asia Commercial Bank (ACB) meanwhile have established companies specialising in finance leasing services, gold and securities trading or offered a series of high interest rate services in a move to improve their competitive edge.
Source: VNE
In line with this, many banks in collaboration with their own partners have introduced their typical services based on advantages in customers, trading network and modern technology.
Experts said cooperating with potential partners is an appropriate way for domestic banks’ development and the method is considered to be better than concentrating only on savings mobilisation, lending, card issuance and trade finance that are strong points of foreign banks.
Recently, the Vietnam Export Import Commercial Joint Stock Bank (Vietnam Eximbank) signed agreements with 16 strategic partners through which the bank can develop services such as money collection, payment, co-signed loan provision, project finance and card issuance.
The strategic partners include the Bien Viet Securities Company, the Saigon Trade Corporation, the PetroVietnam Finance Company, the Saigon Post and Telecommunications Service Corporation and the Kinh Do Group.
The Technological and Commercial Joint Stock Bank (Techcombank) has signed a series of cooperation agreements with local corporations to offer different modes of payment services. For example, is has joined hands with the Corporation for Financing and Promoting Technology (FPT) to supply payment services for Internet ADSL fees.
It also works with the VTC Intecom to supply mobile phone banking services, allowing handset users to make payments for games and goods by sending short messages to the bank after opening an account, and cooperates with the Ho Chi Minh City Insurance Corporation to provide insurance payment services.
Earlier, Techcombank has become the first financial institution in Vietnam to introduce the Internet Banking to the market, enabling the bank's clients to make transactions and check accounts via the Internet.
Meanwhile, the Vietnam Joint Stock Commercial Bank for Private Enterprises (VP Bank) has improved its competitive edge by entering an ATM card alliance with 18 other local commercial banks, which is presided over by the Bank for Foreign Trade of Vietnam (Vietcombank). Accounting for more than 70 percent of the market share, this card alliance is considered the most effective model among the four alliances currently operating in Vietnam.
For its part, the East Asia Bank - the leading card provider in Vietnam - has launched payment services for electricity and running water through its ATM system or branches in Ho Chi Minh City and southern Binh Duong province.
Other commercial banks like the Saigon Thuong Tin Commercial Bank (Sacombank), the An Binh Commercial Bank (AB Bank), the Asia Commercial Bank (ACB) meanwhile have established companies specialising in finance leasing services, gold and securities trading or offered a series of high interest rate services in a move to improve their competitive edge.
Source: VNE
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