Decade of decline

The shareholders’ meeting on February 15 may have been a turning point for the Vietnam Export Import Commercial JS Bank (Eximbank), which has had a long power struggle. Because of this, the bank, which was once among the top-tier banks, has been sliding for the last decade.

The conflicts among shareholders at Eximbank have occurred for nearly 10 years, but reached their peak in the last three years. Shareholders’ meetings could not be organized because the parties could not find a common voice.

The 2019 extraordinary shareholders’ meeting could not be organized and had three postponements. In the last five years, the bank successfully organized shareholders’ meeting once in 2018. However, the results of the shareholders’ meeting went up in a puff of smoke.

Eximbank, at some moments, did not have a CEO, and the chairman of the board of directors lost the post after several hours. During the 10 years of struggling for power among shareholders, trillions of dong of profit have been stuck and could not be paid to shareholders.

The struggle for power has left the bank in turmoil over the last decade with assets declining and the bank lagging behind others.

As the bank has not organized a shareholders’ meeting in the last three years, Eximbank has not reported the business results of 2018, the plans for 2019 and 2020, and some other content. The business results of 2019 and the targets for 2020 and 2021 also could not be approved.

Hot seat

The dispute at Eximbank intensified on March 22, 2019, after seven members of the board of directors had a meeting and chose a new chair – Luong Thi Cam Tu – to replace Le Minh Quoc, though Quoc’s tenure had yet to finish. Tu was CEO of NamABank. Later, she became a member of the board of directors at Eximbank in April 2018.

The decade-long power struggle at Eximbank has blocked tens of trillions of dong worth of dividends and trapped shareholders. The problem may be solved after the latest move of the foreign shareholder.

Quoc then filed a lawsuit at the HCM City Court, requesting to apply temporary emergency measures. However, he decided to withdraw the filing and resigned from the post of chair of the board of directors.

Cao Xuan Ninh was then appointed to the post of chair of Eximbank.

Meanwhile, the post of CEO of Eximbank was vacant. In April 2018, Eximbank appointed Nguyen Canh Vinh to the post of Deputy CEO of the bank. In May 2019, Vinh became acting CEO of the bank after the contract with Le Van Quyet expired and he was not re-appointed.

Eximbank’s board of directors earlier had released a resolution on appointing Vinh to the post of CEO. However, the appointment was not approved by SBV because of invalid papers.

On June 25, 2020, Eximbank convened a meeting and appointed Yasuhiro Saitoh, who was then Deputy Chair of Eximbank, to the post of Chair of the Board of Directors to replace Cao Xuan Ninh, who resigned from the post.

However, days before the shareholders’ meeting on June 30, 20920, the SMBC group of shareholders asked to dismiss Yasuhiro Saitoh. According to SMBC, the institution had stopped all legal relations with Yasuhiro Saitoh on May 18, 2019, so he was ineligible to represent SMBC and hold the post at Eximbank.

On April 13, 2021, turbulence once gain arose. Within one hour, two decisions on appointing the Chair of Board of Directors and the content of two documents were contradictory.

Under Resolution 156/2021/EIB/NQ-HĐQT on April 13, 2021, Eximbank approved the dismissal of Yasuhiro Saitoh as Chair of the Board of Directors, and appointed Nguyen Quang Thong to the post, so that Thong could preside at the meeting of the board of directors on April 13, 2021 and work until the board of directors found new personnel. The board of directors also assigned Thong, on behalf of the board, to sign the resolution.

Eximbank (EIB) released a resolution on early termination of the alliance agreement with SMBC at the request of the Japanese shareholder in a document dated January 5, 2022.

Prior to that, SMBC had acquired 49 percent of FE Credit, the finance company belonging to VPBank, and was expected to become a strategic shareholder of VPBank.

SMBC is currently the biggest shareholder at Eximbank, holding 15 percent of Eximbank shares. The Japanese investor had high hopes for the bank, but it has been bogged down over years because of conflicts among big shareholders’ groups, with many unsuccessful shareholders’ meetings.

With SMBC’s divestment, changes in the power of the bank will occur and the struggle which has lasted a decade may come to an end if the 15 percent of shares held by SMBC is transferred to another party, thus putting an end to the current inconclusive struggle of power.

Eximbank share prices have recently increased sharply in recent days. The share prices hit the ceiling in recent consecutive sessions and the prices soared by 50 percent over the last three months. The high prices allowed SMBC to easily sell shares.

Foreign investors hold 29.7 percent of Eximbank shares. In addition to SMBC, which holds 15 percent of shares, the other two are VinaCapital and a fund managed by Mirae Asset.

Eximbank plans to organize a 2021 annual shareholders’ meeting on February 15, 2022, for the second time.

The internal conflicts have caused Eximbank’s business to decline. While other banks reported big profits for 2021, Eximbank made a modest pre-profit of VND1.2 trillion, down by 10 percent. 

M. Ha

Japanese partner ends strategic alliance agreement with Eximbank

Japanese shareholder Sumitomo Mitsui Banking Corporation (SMBC) has announced the termination of a strategic alliance agreement signed with Vietnam Export Import Commercial Joint Stock Bank (Eximbank).

Vietnamese banks get new bosses

Upon the State Bank of Vietnam’s approval, Pham Quang Dung has been appointed Chairman of the Bank for Foreign Trade of Vietnam (Vietcombank) for the 2018-2023 term.