Grab Vietnam clinches new director
Nguyen Thai Hai Van
Under the lead of managing director of Grab in Vietnam, Nguyen Thai Hai Van, who has deep commercial and customer engagement experience, Grab is expected to strengthen its business growth in tandem with social impact. Van’s new role officially begins from February 1.
She will oversee business planning and operations across all of Grab’s businesses in Vietnam, continuing to drive the growth of ride-hailing, on-demand food delivery, logistics, and fintech across the country.
Van joined Grab Vietnam in November after a successful 17-year career at Unilever Vietnam. She is also co-chair of the Vietnam Mobile Marketing Association.
Russell Cohen, head of regional operations of Grab said, “It has been in our long-term leadership planning to appoint a Vietnamese head to lead the country. I am delighted to have found Van who shares Grab’s passion to use technology to elevate the quality of life for all Vietnamese people. I believe her deep understanding of local conditions and users’ needs will drive closer collaboration with the government and business stakeholders towards fulfilling our Grab For Good mission in Vietnam.”
Jerry Lim, the former country head, will return home to a Singapore-based role as regional head of customer experience. He said, “Besides having sharp business acumen, Van is someone who leads with her heart. She has been leading discussions on outserving consumers, driver-partners, and merchant-partners. With her Vietnamese roots, I believe she will be able to build stronger hyperlocal partnerships that will bring about even greater social good for all,” said.
With Grab’s recently announced $500 million more investment into Vietnam over the next five years, Van will tap and invest in new opportunities emerging from fintech, mobility, and logistics, in order to bring greater value and innovation for Grab’s customers and partners.
“I am honoured to have worked with a team of spirited and resilient Vietnamese Grab talents who are truly committed to making a positive social impact on fellow Vietnamese’s lives,” said Van. “It became evident to me that growing Grab is about the livelihoods of millions of Vietnamese people. All these encounters inspire me to do more. I look forward to collaborating with the government and business partners to serve even more Vietnamese and leave no one behind in today’s digital economy,” she said.
Vingroup affiliate receives FIDO2 certificate
VINCSS Internet Security Services Limited Liability Company, an affiliate of Vingroup, has just been awarded the FIDO2 Certificate for its authentication key product by IDO Alliance.
FIDO2 is the overarching term for FIDO Alliance’s newest set of specifications. FIDO2 enables users to leverage common devices to easily authenticate online services in both mobile and desktop environments.
Around the world, there are 13 countries capable of mastering technology for producing FIDO2-certified products, led by developed countries such as USA, Japan, Canada, UK and Germany.
This makes Vingroup one of 34 companies capable of producing and mastering the most modern technology in the field of security authentication.
This event not only marks VinCSS in the world security technology community but also affirms the transformation of Vingroup as the leading technology corporation, gradually integrating with world-class and complex technologies.
This result also enables VinCSS to rank among FIDO2-certified technology companies and corporations such as Google, Apple, Microsoft, Fujitsu, Yubico, Solokey and Kensington.
To achieve the certification, VinCSS FIDO2 Authenticator must pass the interoperability testing with a rate of 180/180 on two consecutive days. All product operations must be compatible with all popular browsers. Interactions with ten authentication servers specified by FIDO Alliance must have zero errors.
Besides, design engineers of VinCSS must pass a face-to-face interview with the FIDO Board Certification Committee with lots of difficult questions about the technological design details of the product. Last but not least, VinCSS was required to submit a Vendor Questionnaire detailing all the technical specifications of the product for evaluation by the FIDO Alliance.
Nguyễn Phi Kha, Director of Research and Development of VinCSS, said it took nine months of research and development before VinCSS was FIDO2 certified by FIDO Alliance.
“This success of VinCSS will make a big change in defence activities of modern network security in Việt Nam. With our team of world-class experts, VinCSS will continue to introduce a series of practical products and services such as MSSP, VinSOC, Zero Trust Platform, ThreatHunting and IoT Security Lab,” Kha said.
In 2020, VinCSS will aim to provide an authentication service chain using the most modern technology, including types of authentication keys that support Bluetooth, NFC (Near-field communication, fingerprints, authentication solutions using applications and mobile phones as keys and services to support agencies and organisations converting authentication systems to prevent threats from network attacks such as phishing attacks.
FIDO2 authentication is the safest way to authenticate users. FIDO2 aims to eliminate the difficulty of having to remember too many passwords for end users as well as eliminating the risk of phishing, account cracking and hijacking network attacks. FIDO2 has been supported on all popular browsers, products and services of major vendors such as Google, Apple, Microsoft, Facebook, Samsung, Sony and Huawei. This product is becoming a global conversion trend with an increasing number of users.
KMS Solutions ties up with US’s Infor for warehousing, financial solutions
Software company KMS Solutions on Tuesday announced it had entered into a strategic partnership with the US’s Infor in business cloud software to help Vietnamese businesses digitise warehousing and financial management.
The tie-up accentuates both parties’ endeavours to plug the gap in the local market, which has a dearth of world-class solutions.
To mark the beginning of this undertaking, KMS introduced Infor SunSystems and Infor CloudSuite warehouse management software (WMS) to help clients modernise two key areas, accounting and financial management and warehouse management.
Infor SunSystems, which is used by more than 9,000 customers in more than 190 countries, helps translate financial data into actionable insights that guide organisational strategies.
It has embedded in it features such as multi-currency and multi-language capabilities, real-time analytics and business intelligence.
Infor WMS, a next-generation warehouse management system, offers comprehensive visibility across the warehouse eco-system, enabling businesses to improve efficiency, reduce costs and mitigate complexity.
Infor recently earned recognition as a leader in Gartner’s 2019 Magic Quadrant for Warehouse Management Systems.
“In Southeast Asia, Viet Nam is at the forefront of innovation,” Fabio Tiviti, vice president of Infor ASEAN, said.
“However, most leading businesses here do not have many choices of high-end solutions that could cater to their needs for internationalisation or to scale to their evolving business structure.
“Infor’s industry-specific solutions benefit from our deep industry expertise and micro-verticals focus, making us strategically positioned to offer businesses in Viet Nam exactly what they need.
Le Tran Bao Duy, general director of KMS Solutions, said: “Businesses in Viet Nam are seeking growth in the face of fierce competition, both domestically and regionally. They demand a better system to operate at a new level of scale and complexity, especially in warehouse operations and financial management.”
Vietnamese shares to struggle with profit-taking before Tet break
The Vietnamese stock market will take a break for the Tet (Lunar New Year) holiday on Thursday and the upcoming three-day period may be a good chance for investors to earn some profits.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange gained 0.48 per cent to close Friday at 978.96 points, totalling a four-day increase of 1.36 per cent and weekly growth of 1.07 per cent.
The HNX-Index on the Ha Noi Stock Exchange ended last week at 103.88 points, up a total 1.62 per cent after one trading week.
The stock market was driven by the strong performance of bank stocks, which made strong gains on investors’ expectations for better business operation in 2020.
The three largest banks by market capitalisation on the Ho Chi Minh Stock Exchange – Vietcombank (VCB), Vietinbank (CTG) and Bank for Investment and Development of Vietnam (BID) – took turns to lift the market.
Vietcombank shares ended last week at a new high of VND94,500 (US$4.07) per share, totalling a weekly gain of 5.6 per cent. Vietinbank shares jumped 5.9 per cent and BIDV shares moved up 4.3 per cent during the week.
Large-cap stocks remained the focus. Vietcombank, Vietinbank and BIDV were among eight of the 10 largest stocks by market value on HoSE to make weekly gains.
Steel companies also had a good week, including Hoa Phat (HPG), Hoa Sen (HSG), Nam Kim Group (NKG) and Viet Nam-Italy Steel JSC (VIS).
HPG jumped 3.3 per cent, HSG gained 4.3 per cent, while NKG and VIS soared 10.6 per cent and 16.9 per cent during the week, respectively.
Meanwhile, investors were unwilling to bet on mid-cap and small-cap stocks.
PetroVietnam Low Pressure Gas JSC (PGD) slumped a total of nearly 30 per cent last week.
The company last week announced the Japanese firm Saibu Gas Co Ltd bought 18 million PGD shares to own 21 per cent of the Vietnamese firm.
Foreign investors net-bought a total of VND370 billion worth of local stocks on the two exchanges, boosting market sentiment slightly.
But market liquidity and sentiment remained low, Sai Gon-Ha Noi Securities (SHS) said in its weekly report.
Market trading liquidity drained as it always did in previous years when Tet approached, SHS said.
Investors were still doubtful about chances the stock market would recover, the company said.
But the strong performance of listed banks’ stocks would extend market growth a little bit longer before the market closed for the holiday, SHS added.
The VN-Index is being twisted by the over-expectation investors have in bank stocks, Asean Securities Co said in a note.
The market growth this week would depend a lot on listed banks while investors would have to seek other sectors to take the spotlight, the company said.
Both SHS and Asean SC forecast the VN-Index would move between 970 points and 990 points in the next three trading days.
The firms said the VN-Index would struggle with profit-taking that arises to take advantage of bank stocks’ strong growth last week.
The stock market will trade on Monday, Tuesday and Wednesday before taking a break on Thursday for the Tet holiday. It will return to action on Thursday, January 30, 2019.
PM rings the bell
Prime Minister Nguyen Xuan Phuc will hit the gong at the Ho Chi Minh Stock Exchange on Thursday, January 30 to begin the first trading day of the new lunar year.
In previous years, the Prime Minister rang the bell at the Ha Noi Stock Exchange to start the new lunar year for the stock market.
According to the Prime Minister, the change will bring a new momentum for the Vietnamese stock market in the Year of the Mouse. The action also demonstrates the Government’s determination to complete the policies and activities to boost the local markets.
Vissan’s revenues rise 22 per cent in 2019
Leading food processor Vissan Joint Stock Company reported pre-tax profits of VND212.66 billion (US$9.19 million) on revenues of VND4.9 trillion ($211.6 million) last year, representing increases of 22 per cent and 10 per cent.
Nguyen Ngoc An, its general director, said last year the company sold 1,675 tonnes of beef, 24,544 tonnes of pork and 26,060 tonnes of processed food products, increases of 14 per cent, 2 per cent and 15 per cent from 2018.
It launched 10 new ham, pasteurised sausage, meat paste, and dried processed food products last year, and for Tet (Lunar New Year) it has launched pork braised with eggs and coconut water packed in 500g plastic boxes.
It also supplies herb-fed pork from pigs bred without using antibiotics.
Talking about plans for this year, he said the company would continue to focus on developing high-quality animal breeding areas to enhance hygiene and food safety control for all its products.
It would also focus on developing tray-packaged pork products using chilled meat production process and conducting research to come up with more marinated food products to offer greater convenience to customers, he said.
In its processed product line, it will focus on developing new products whose origins can be traced and are made from natural materials.
It has also set itself a target of further selling fast moving consumers goods in rural and remote areas and enhancing sales through modern trade channels and to hotels-restaurants and the catering sector.
Minh Phu Seafood shares fall on investigation of tax evasion
Minh Phu Seafood Corp shares fell for a second day after the company confirmed it would co-operate with the US investigation into whether the Vietnamese firm had evaded anti-dumping taxes or not.
The statement was made after international and local media last weekend reported the US Customs and Border Protection (CBP) had launched an investigation into whether MSeafood, a US division of Minh Phu Seafood, violated US trade laws by evading anti-dumping taxes on frozen warmwater shrimp from India.
A report on undercurrentnews.com on January 16 said the CBP had sent a letter to MSeafood Corporation, located in Fountain Valley, California, regarding the initiation of investigation and interim measures.
In the letter, the CBP’s acting director of Trade Remedy and Law Enforcement Directorate informed Minh Phu Seafood chairman Le Van Quang about the formal investigation as the CBP had found evidence that “supports a reasonable suspicion that MSeafood entered covered merchandise into the customs territory of the United States through evasion” and the CBP had imposed interim measures.
The investigation was initiated upon “an allegation submitted by the Ad Hoc Shrimp Trade Enforcement Committee (AHSTEC) on evasion of anti-dumping duties by MSeafood,” the letter said.
The AHSTEC claimed MSeafood imported Indian-origin frozen shrimp into the US, which was transshipped through Viet Nam, the letter said.
Minh Phu Seafood Corp has responded it had not received any official inquiries from the CBP and the interim measures were based only on evidence provided by AHSTEC without asking for co-operation from Minh Phu Seafood.
The firm’s US lawyer had registered with the Enforce and Protect Act (EAPA) to deliver evidence so the final measures could be made, the company said.
“Minh Phu does not export finished Indian shrimps to the US. The company only buys raw materials for processing,” the firm said, adding some information provided by CBP regarding its production and imports was inaccurate.
The company said it would fully co-operate with US regulators to settle the case.
In 2019, Minh Phu Seafood’s total production was down 9.05 per cent on-year to 59,500 tonnes.
Total exports were 57,700 tonnes, worth US$643 million. The figures were down 14.69 per cent and 14.25 per cent on-year.
In the US market, the company recorded a 19.57 per cent annual drop in its exports, which retreated to $246 million.
Minh Phu Seafood shares (UPCoM: MPC) dropped 1.7 per cent to end Monday at VND22,500 ($0.97) per share. Its shares tumbled 6.2 per cent on Friday after the investigation was reported.
Yeah1 Group reports losses in 2019
Local media firm, Yeah1 Group (YEG), recorded a loss of VND158 billion (US$6.8 million) in the fourth quarter of last year, pushing 2019’s total losses to VND372 billion.
In Q4, the firm recorded sales of VND435 billion, a 32 per cent reduction from the same period in 2018.
The fall of Yeah1 shares started in early March 2019, after YouTube said it would terminate its Content Hosting Agreement (CHSA) with subsidiaries and associates of Yeah1 at the end of this month, including US-based ScaleLab LLC and Thailand-based SpringMe Ptd Ltd.
In a statement sent to Yeah1, YouTube said SpringMe, in which Yeah1 has a 17 per cent stake, violated the site’s policies in selecting and managing channels and videos.
Therefore, the statement said, YouTube had to terminate its entire agreement with Yeah1’s subsidiaries and associates that are running YouTube Adsense–based business activities.
Nguyen Anh Nhuong Tong, Chairman of Yeah1 told local media: "We had high expectations for 2019, but could not recover from YouTube’s case.”
Tong added: “Over the past six months, Yeah1 has been continuously restructuring to have some growth. I'm sure Yeah1 will be back in the race.”
Founded in 2006, Yeah1 Group became a top-ranked multi-channel network in Asia. It started listing 31.28 million shares on the Ho Chi Minh Stock Exchange (HoSE) with the code YEG in June 2018, at the price of VND250,000 each. Now each share of the firm closed at VND37,000 on HoSE.
Sacombank’s profit to exceed 20% of 2019 plan
Sacombank’s consolidated pre-tax profit is expected to reach nearly VND3.2 trillion (US$138.05 million) this year, surpassing 20 per cent of the profit target approved at its annual general meeting.
Sacombank on December 20 held a meeting to review its performance in 2019 and a ceremony to celebrate its 28th anniversary in HCM City.
Speaking at the ceremony, Duong Cong Minh, Sacombank’s chairman, said the bank has total assets of VND457 trillion ($19.7 billion), deposits of VND413 trillion ($17.8 billion) and outstanding loans of more than VND296 trillion ($12.76 billion), while the non-performing loan ratio has now dropped to 1.75 per cent.
Sacombank’s customer base has been stable during the year with nearly six million individuals and corporate customers. It has network of 570 transaction offices in Viet Nam’s 52 provinces and cities and Laos and Cambodia. It has also maintained steady growth in terms of revenues and market share.
Operational safety and risk management parameters are in compliance with the roadmap set out by the State Bank of Vietnam under Circular 41 on the adoption of Basel II standards by January 1, 2020.
In addition, Sacombank has also completed the governance mechanism under Circular 13 and implemented synchronously advanced projects for Basel II such as the loan origination system, credit risk quantification model, risk management database framework, upgrading and perfecting the asset liability management framework, valuation and market risk regulatory capital charged model, among others.
Sacombank has standardised its organisational structure; strengthened management methods through the implementation of a balanced scorecard model throughout the system; improved quality of customer services, diversified products and services; and applied modern payment technology and preferential policies.
Recognising the market has opportunities and difficulties in 2020, Sacombank will focus on expanding scale and market share and further improving business efficiency and financial indicators; strict control of bad debts and credit quality; speeding up restructuring; enhancing customer experiences; applying modern IT and security platforms; accompanying business community and economic sectors; streamlining of the bank's apparatus, and improving the quality of human resources and working environment.
Korean bank Daegu to open branch in HCM City
Daegu Bank of the Republic of Korea (RoK) is preparing to open a branch in HCM City after getting the green light from the State Bank of Viet Nam (SBV).
Under a document released late last week, SBV approved in principle the establishment of Daegu Bank’s HCM City branch.
The Korean bank is responsible for completing procedures in accordance with the SBV’s regulations and instructions to submit to the SBV’s Governor for consideration and decision on licensing the establishment of the branch, the SBV stated in the document.
The presence of the bank in HCM City is welcomed as a large number of Korean businesses invest in the southern metropolis.
Korean investment in Viet Nam has expanded over the years with a rise of 37 per cent each year, making Korea the largest foreign investor among the 132 countries and territories investing in Viet Nam, at US$80 billion by the end of November 2019. Viet Nam is also the biggest investment recipient among ASEAN countries.
The Korea Trade and Investment Promotion Agency (KOTRA) forecast the wave of Korean investment in Viet Nam is continuing as the Southeast Asian nation is considered a favourable investment destination for Korean investors.
KOTRA reported that Korean firms have high hopes for Viet Nam’s growth potential and highly evaluate the skills and diligence of workers.
Besides Korean banks, foreign finance institutions from other countries are also promoting their in-depth development in the Vietnamese market. The country currently houses nine foreign-owned banks, about 50 foreign bank branches, more than 50 representative offices of foreign credit institutions and many foreign-owned finance companies.
Fitch assigns ANZ Vietnam first-time 'BB' rating; positive outlook
Fitch Ratings has assigned a first-time long-term foreign-currency issuer default rating (IDR) of 'BB' and long-term local-currency IDR of 'BBB' to ANZ Bank Vietnam Limited (ANZV).
Under the rating action released on Monday, the bank’s outlook was positive, reflecting Fitch’s outlook on the Viet Nam sovereign (BB/Positive).
Fitch believes that the bank's parent Australia and New Zealand Banking Group Limited (ANZ) has a strong ability to extend extraordinary support to its Viet Nam subsidiary - given the parent's credit profile, and ANZV's small asset base that accounted for only around 0.2 per cent of the parent's total assets at end-2018.
Nevertheless, the rating agency noted, Fitch believes that currency transfer and convertibility risks, as reflected in Viet Nam's country ceiling of 'BB', could represent a significant constraint on ANZV's ability to receive support from its Australia-based parent. This is reflected in the support rating of '3' that indicates a moderate probability of support from its higher-rated Australia-based parent, in times of need. ANZV's long-term foreign currency IDR is capped at the Vietnamese country ceiling.
Fitch regards the risk of sovereign restrictions on local-currency repayments as lower than that of foreign-currency restrictions.
“We also expect parental support to be robust, assuming no very high levels of sovereign or macroeconomic stress. Hence, ANZV's long-term local-currency IDR is rated two notches above Viet Nam's sovereign rating,” Fitch said.
Fitch’s view on ANZ's propensity to provide support to ANZV is based on ANZV's relatively limited role in the group, compared with larger subsidiaries in more strategically important markets.
According to Fitch, it has not assigned a viability rating to ANZV due to its high level of management and operational linkages with its parent and the absence of a meaningful standalone franchise. ANZV has a small asset base, constituting a mere 0.3 per cent of Vietnam banking system assets at end-2018.
SeABank completes settlement of VAMC special bonds
The Southeast Asia Joint Stock Commercial Bank (SeABank) has completed the early redemption of all special bonds at the Viet Nam Asset Management Company (VAMC), thereby helping the bank proactively monitor and handle bad debts.
The move also helps SeABank increase transparency in its financial statements, creating momentum for profit growth in subsequent years.
With the redemption of bonds before their expiry dates, SeABank has become one of the first banks in Viet Nam to complete the settlement of special bonds at VAMC.
The total value of special bonds bought by SeABank from VAMC in 2019 was more than VND3.5 trillion (US$150 million).
After the premature settlement of all special bonds, SeABank will not have to make provision for VAMC bonds from January 1, 2020, thereby contributing to increasing profits for the bank in the near future.
This year, Seabank increases its chartered capital to VND9.3 trillion. The bank is recognised by the State Bank as having met Basel II international standards and has also been rated by Moody's long-term credit level B1 and voted by The Asian Banker in the Top 500 largest and most powerful banks in Asia-Pacific.
VAMC currently issues special bonds in return for bad debt, which banks may use as collateral to secure funding from the central bank. Most of the NPLs purchased from commercial banks are still stuck at the VAMC.
SeABank report claims profit more than double over 2018
Southeast Asia Commercial Joint Stock Bank (SeABank) released a performance report for 2019 in which the bank yields VND1.39 trillion (US$60 million) in profit before tax, an increase of VND768 billion or 123 per cent jump compared to 2018, the highest annual profit growth by the bank to date.
According to the report, SeABank successfully met all business objectives set during its annual shareholders meeting held at the beginning of the year.
SeABank’s net assets was estimated at VND157 trillion, a 12.4 per cent increase year-on-year, and total outstanding loans at VND98.6 trillion, a 17.46 per cent increase year-on-year.
Non-interest income was reported at VND2.3 trillion and accounted for over 44 per cent of the bank’s net income.
SeABank managed to maintain a capital adequacy ratio of 11.6 per cent in accordance with the State Bank of Vietnam (SBV) Directive 41/2016/TT-NHNN.
The bank’s return on assets (ROA) and return of equity (ROE) performance has improved to reach 0.75 per cent and 12.3 per cent, an increase of 120.6 per cent and 61.7 per cent respectively compared to the previous year.
In 2019, the bank completed an early redemption of all special bonds at the Viet Nam Asset Management Company (VAMC). The SBV has approved SeABank for Basel II ahead of schedule and Moody’s granted SeABank a long-term credit level B1.
The report said SeABank has increased its charter capital to VND9.37 trillion while expanding its network to 167 branch offices to serve some 1.2 million customers across the country.
Gov’t bond yields hit record low
Government bond yields hit a record low in December 2019, with the interest rates of Treasury bonds of all terms seeing decreases by between 0.03 and 0.37 percentage points compared to November.
The rate of treasury bonds of five-year term saw the largest drop, at 0.37 percentage points.
The State Treasury of Viet Nam issued VND9.9 trillion worth of Government bonds in December, 28, 2 per cent lower than the previous month.
In 2019, the total Government bonds issued was VND197.8 trillion, up 19.3 per cent.
In the primary market, Government bond interest rates continued to decline, with five-year term rates dropping by 37 percentage points to 2 per cent, 10-year and 30-year terms down respectively 3 and 10 percentage points to 3.48 per cent and 4.55 per cent.
In the secondary market, Government bond rates hit a record low, at 1.55 per cent, 2.01 per cent and 3.42 per cent for one-year, five-year and 10-year terms, respectively.
According to Ban Viet Securities Company, Government bond rates would continue to be under downward pressure in January in the context of abundant banking liquidity.
Government bond rates averaged 4.68 per cent in the January-November period, representing a decline of around 1.6 per cent compared to the beginning of the year.
As of November, the Government bond market was equivalent to 25.6 per cent of the country’s gross domestic product.
Central bank approves capital hike for finance company HD Saison
The State Bank of Viet Nam (SBV) has approved consumer finance company HD Saison to increase charter capital to VND2 trillion (US$85.84 million) from VND1.4 trillion.
After the capital hike, Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) owns 50 per cent of Saison’s charter capital, Japan’s Credit Saison Co Ltd holds 49 per cent and HCM City Securities Company holds 1 per cent.
Established in 2007, Societe Generale Viet Finance Limited Liability Company (SGVF) - the original name of HD Saison - was the first fully foreign-owned non-bank financial company to obtain a business registration certificate from the SBV with an initial charter capital of VND520 billion.
SGVF was acquired by HDBank in 2013 and changed its name to the Ho Chi Minh City Development Joint Stock Commercial Bank Finance Limited Liability Company (HDFinance). In 2015, HDFinance became the HD Saison Finance Co (HD Saison) after receiving strategic investment from Japan’s Credit Saison group.
HD Saison currently serves nearly seven million customers at 17,000 offices nationwide. The finance company also provides installment loans to individual customers via agents located at the POS of its partners, such as motorbike shops, electronics and furniture stores, tourist agencies, and other retailers. Most clients range from low to middle-income earners who are not served or under-served by banks, which often require lengthy procedures and a strict credit history.
HCM City banking sector urged to keep bad debts low
Commercial banks and credit institutions in HCM City need to continue to restructure and strengthen control of credit quality to prevent a return to the days of high bad debt ratios, the deputy governor of the State Bank of Vietnam Dao Minh Tu has warned.
Speaking at a conference held to set tasks for the city’s banking sector this year, Tu also called on credit institutions to increase the use of technology for payments and develop more new products and services to meet customers’ demands.
Reporting on the performance of the banking sector last year, Nguyen Hoang Minh, deputy director of the central bank’s city branch, said there was good growth in all areas.
During the year deposits rose by 13.5 per cent to over VND2,498 trillion (US$107.8 billion), and outstanding loans by 14 per cent to over VND2,302 trillion ($99.3 billion).
A city programme that links up banks and businesses helped 8,555 businesses get total loans of VND303.42 trillion last year at preferential interest rates of 6.5-7 per cent and 9 per cent for short-term and long-term loans.
Banks also gave VND162.9 trillion in short-term loans to five priority sectors (agriculture and rural development, production of export goods, small- and medium-sized enterprises, supporting industries, and high-tech enterprises).
These programmes have enabled businesses to expand, Minh said.
“Most credit institutions have reported good results and their bad debts are under control.”
The bad debt ratio at city banks last year reduced to 2.1 per cent by the end of November last year from 2.64 per cent at the end of 2018.
In the first 11 month of 2019 they recovered more than VND99.5 trillion worth of bad debts.
But they complained about difficulties and called for more assistance from the police and other relevant agencies in collecting the debts.
To maintain the growth momentum this year and beyond, the banking sector has mapped out a number of measures, including developing services using modern technologies.
Pham Quoc Thanh, deputy general director of HDBank, urged the Government to soon promulgate regulations for digital transformation and create a legal framework for digital payment solutions and other technologies.
VPBank provided with loan to undertake green projects
The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has signed a green credit loan agreement worth US$212 million with the International Finance Corporation and other international co-financiers in Ha Noi.
VPBank said this is the first green loan transaction in Viet Nam.
Green credit refers to lending dependent on environmental criteria for the planned use of funds. It is part of wider sustainable investing and aims to reduce the impact on the environment of new lending activities.
This loan package marks an important milestone for VPBank and opens the opportunity for it to pioneer in the green financial market in Viet Nam.
Under the agreement, VPBank will also receive technical support from IFC experts in building a green credit policy framework and sustainable financial instruments, as well as monitoring, managing and reporting on the status of capital use for green projects, which will be certified by a reputable international organisation.
In order to meet the stringent requirements of the loan, VPBank has invested in training a group of green credit experts with international certificates to evaluate the green standards in each project.
BIDV in top four largest firms by market value
The Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV) is now the fourth largest listed company by market value.
BIDV shares (HoSE: BID) have gained a total of 82 per cent since early June 2019 to end Friday at VND53,900 (US$2.32) per share.
Since the beginning of the year, BIDV shares have advanced a total of 16.8 per cent.
The bank’s market capitalisation on Friday was nearly VND215.18 trillion ($9.27 billion), making it the fourth largest firm on the Ho Chi Minh Stock Exchange by market value.
The top three are real estate and industrials firm Vingroup (VIC), Vietcombank (VCB) and property developer Vinhomes (VHM).
In 2019, BIDV recorded VND10.77 trillion in total pre-tax profit, up 14 per cent on-year. The bank eyes this year’s profit to increase by 17 per cent on-year to VND12.6 trillion.
The previous fourth largest firm on HoSE was the Vietnam Dairy Products JSC (Vinamilk, HoSE: VNM).
The dairy firm’s shares on Friday edged up 0.3 per cent to end at VND118,600 per share.
At that price, Vinamilk’s market value was more than VND206.5 trillion.
Shinhan Bank Vietnam assigned stable outlook by S&P
Shinhan Bank Vietnam Ltd. (Shinhan Bank Vietnam) has been assigned a BB (stable) long-term rating by Standard & Poor’s.
The first foreign bank in Vietnam, Shinhan Bank has achieved Basel II norms, with its capital adequacy ratio (CAR) of 18.05 per cent being much higher than the minimum required CAR of 8 per cent.
Shin Dong Min, CEO of Shinhan Bank Vietnam, said Vietnam is a key market with great potential, one where Korean corporates are expanding their production base and operations.
The lender is a subsidiary of Shinhan Bank Korea, an affiliate of Shinhan Financial Group.
For three straight years (2016 to 2018), Shinhan Bank was in the list of the 50 Safest Banks in the world released by Global Finance.
It was also listed by Asian Banker as the Best Retail Banker in the Asia Pacific region for two years in a row (2017 and 2018).
In 1993 Shinhan Bank opened a representative office in HCM City, offering a diverse portfolio of tailored corporate and consumer banking products and solutions.
In the 27 years since, it has developed a broad network across the country with 36 branches and transaction offices, ATMs and modern e-banking services to serve millions of corporate and individual clients.
Last year it won the HR Asia Best Company to Work for in Asia award from respected regional publication, HR Asia.
A financial services company based in the US, S&P is one of the three largest and most prestigious credit rating agencies in the world.
Its credit ratings have been published since 1916 to provide investors and market participants world-wide with independent analyses of credit risk.
Techcombank makes pre-tax profit of VND12.8 trillion
The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) earned pre-tax profit of VND12.8 trillion (US$550.7 million) and revenue of VND21.1 trillion, marking increases of 31.5 per cent and 24.7 per cent year on year, respectively.
In its latest report, Techcombank said net interest income reached VND14.3 trillion, up 25.2 per cent year on year. Meanwhile, non-interest income rose by 23.4 per cent to VND6.8 trillion, accounting for 32.3 per cent of total revenues.
The report showed that the provision expenses decreased by 50.3 per cent supported by healthy asset quality and prudent risk management. Cost-to-income ratio of 34.7 per cent was within the bank’s initial target. Return on assets of 2.9 per cent was the best in the market and is consistent with Techcombank’s low risk, high return strategy.
Total assets increased 19.5 per cent compared with the same period last year, reaching VND383.7 trillion with credit growth expanding 18.8 per cent. Techcombank maintained ample liquidity with a loan-to-deposit ratio of 76.3 per cent and short-term funds to medium-to-long-term loans ratio of 38.4 per cent. Techcombank also maintained its position as the best capitalised bank in Viet Nam with a Basel II CAR ratio of 15.5 per cent, nearly double the Basel II Pillar I minimum requirement.
In 2019, Techcombank added 1.1 million net new customers to bring the total customers served by the bank to 7.3 million. Customers using e-banking services increased from 56 per cent to 76 per cent year on year. Transaction volume and value through Techcombank’s mobile channels increased to 172 million, up 217 per cent compared with the same period last year and VND2.582 trillion (up 244 per cent year on year), respectively, thanks to the ongoing convenience and preference for the bank’s digital solutions.
VIB’s pre-tax profit skyrockets in 2019
The Vietnam International Bank (VIB) earned more than VND8.11 trillion (US$350 million) in revenue in 2019, up 33 per cent year-on-year, according to a financial report released on Monday.
The bank’s service revenue doubled last year’s figure to VND3.42 trillion, accounting for 22 per cent of its total revenue.
Meanwhile, provision expenses dropped 7 per cent to VND605 billion as its non-performing loan ratio declined to 1.7 per cent from 2.2 per cent. The bank also reacquired all bad debts it sold to the Viet Nam Asset Management Company.
Thanks to these positive figures, the bank’s pre-tax profit went up significantly by 50 per cent to more than VND4 trillion.
As of December 31, total assets amounted to nearly VND185 trillion; outstanding credit balance hit VND133 trillion; and deposits from customers and valuable papers topped VND140 trillion.
Late last year, VIB became the first bank in Viet Nam to complete the three pillars of Basel II, which are minimum capital, supervisory review and market discipline.
PM asks Central Economic Committee to adopt innovative thinking
Prime Minister Nguyen Xuan Phuc has asked the Communist Party of Viet Nam's Central Economics Committee (CEC) to develop an innovative economic mindset.
Attending the CEC’s conference to review activities in 2019 and set tasks for 2020on Friday in Ha Noi, PM Phuc appreciated the CEC’s efforts over the last seven years since it was re-established to advise the Party Central Committee, especially in 2019 with increasingly comprehensive activities to meet new requirements.
He said for leading and guiding the country's economic development, the CEC should target high quality projects that meet the needs of the current technology era.
Phuc emphasised: "The institution is changed but the economic mindset has not.”
If unpredictable situations continue in the region and the world, the PM told the CEC to unite and co-ordinate better with other ministries, departments and the Government.
He also asked the CEC to continue researching a strategic plan for 2020 to deal with climate change.
Phuc also asked the committee to work on an adjusted plan for the country’s industrialisation that matched the world’s climate change adaptation efforts.
At the same time, he told the committee to create more detailed policies for technology transfer and the local manufacturing industry.
Saying that Viet Nam has 28 coastal provinces and cities, Phuc asked the CEC to develop a plan for the marine economy to take advantage of its potential.
Phuc also asked the committee to research how to utilise the country's golden population, especially the middle class, which could create a driving force for national development.
According to a CEC report, it led the development of eight major projects, assigned by the Politburo last year.
These were important projects that produced development guidelines for agriculture, farmers and rural areas, responding to climate change, taking opportunities from the Fourth Industrial Revolution and ensuring energy security.
HCM City eyes faster public investment disbursement than last year
HCM City authorities plan to review obstacles to public spending and the speed of fund allocation and disbursement this year.
Le Thi Huynh Mai, director of the Department of Planning and Investment, said the city spent VND24.62 trillion (US$1.06 billion) last year, or only 85 per cent of the allocation for public spending.
Transport infrastructure was one of the areas with a low disbursement rate, she said.
“The disbursement of public expenditure differed every month with large sums being disbursed during the final months of the year.”
Some projects are yet to complete investment procedures and are still in the process of finalising costs or extending loan agreements, especially urban rail projects like the metro line No 1 between Ben Thanh Market in District 1 and Suoi Tien Theme Park in District 9.
According to a report by the city government to the Ministry of Transport, the city needs more than VND83 trillion to execute 19 major traffic projects this year, but has managed only 35 per cent of the amount.
The main reasons for slow disbursement of public investment include tardy land acquisition for some projects, delayed completion of administrative procedures and delays in completing investment procedures and designs.
Besides, many projects are allocated funds that cannot be disbursed due to problems related to land acquisition and resettlement.
To speed up public spending the city has assigned the responsibility for the progress of projects to officials, whose performance will also be assessed by the rate of disbursement.
It will also review and classify projects that face obstacles related to investment, construction and bidding procedures, land procedures and site clearance and capital disbursement to promptly work out solutions.
It will also take away funds from projects with low disbursement rates and transfer them to projects with higher rates.
It requires projects to be completed this year to be speeded up and final checks and payments to be made to contractors.
In the case of those to be completed after 2020, developers have been told to urge contractors to speed up construction, complete legal procedures and carry out final checks of completed works to pay the contractors on time.
For new projects, developers need to prepare design documents and cost estimates in accordance with regulations, select contractors and ensure speedy construction, and speed up compensation payment and resettlement.
Developers must submit a feasibility report to competent authorities for approval in accordance with the Law on Public Investment, the Construction Law and others.
The Department of Natural Resources and Environment has been ordered to work with the Ministry of Natural Resources and Environment to speed up payment of land compensation and resettlement assistance.
Over the years public investment in the city has been slow, seriously affecting socio-economic development, experts said.
It also causes loss of trust among investors and donors and national prestige, they said.
It also results in rising costs, they added.