Vietnam Bank for Agriculture and Rural Development (Agribank) said in a statement on November 11 that recent rumors about its bankruptcy in some localities are untrue.

Clients transact at an Agribank office

Agribank also confirmed that the insolvency of its finance leasing company ALC II does not affect the operations of the bank or its clients’ deposits.

After the former general director of Vietnam Social Security (VSS), Le Bach Hong, was arrested on November 9, some news websites mentioned that Agribank guaranteed ACI II’s loans from VSS, and concluded that Agribank must be accountable for repaying debts on behalf of ALC II.

Some false rumors then spread that Agribank has gone bankrupt. Consequently, a large number of workers at some industrial parks rushed to the bank’s offices to withdraw their money, according to the bank.

The bank said that while implementing its restructuring plan, ALC II filed a request to the HCMC People’s Court for declaring bankruptcy on May 2016. It was not until July 2018 that the court issued a decision on the declaration of bankruptcy for ALC II.

On October 12, the State Bank of Vietnam issued a decision revoking the establishment and operating license of ALC II.

The bank cited the decision of the court as saying that Sen Viet Asset Management and Liquidation Company was tasked with settling the debts of ALC II.

The bank noted that ALC II is a non-bank credit institution whose legal status is independent. The company’s violations, which were committed between 2006 and 2008, had been uncovered and handled in past years.

Upon the restructuring, the business activities of the bank have witnessed improvements, such as gradual increases in its pre-tax profits over the years.

The bank reported that its pre-tax profit was VND4,212 billion (US$180.8 million) in 2016. The figure for last year was VND5,018 billion (US$215.5 million). Between January and November this year, the bank earned some VND6 trillion (US$657.7 million).

In late 2017, investigators at the Ministry of Public Security filed charges after investigating two incidents at VSS and Vietnam Debt and Asset Trading Corporation (DATC), following an expanded probe into an economic case which happened at ALC II and resulted in former ALC II CEO Vu Quoc Hao receiving a death sentence for embezzlement of assets and intentional violations of regulations.

Last Friday, Le Bach Hong, who was also former Deputy Minister of Labor, Invalids and Social Affairs, together with three others, was detained on charges of infringing upon State regulations on economic management causing serious consequences, based upon the 1999 Penal Code.

SGT