The State Audit, in its report on audit results of the socio-economic development recovery program submitted to National Assembly deputies, proposed that the State Bank of Vietnam (SBV) transfer DongA Bank to another bank because of its negative stockholder liquidity.

DongA Bank is one of the four weak commercial banks subject to compulsory transfer as planned by SBV in early 2022. The other three include OceanBank, GPBank and CBBank.

However, the process has been going very slowly. It has recently received the government’s approval for compulsory transfer and is now under the valuation process.

The commercial banks subject to mandatory transfer have high bad debt and outstanding assets, negative stockholder equity, increasingly high accumulated losses and an inability to satisfy requirements for safe operations. The risks are very high at some banks, which threatens the safety of the entire banking system.

DongA Bank was put special control on August 14, 2015. The bank has charter capital of VND5 trillion, which has not changed since 2014. Of this, 40.68 percent of shares are  held by institutional shareholders.

The list of shareholders updated as of December 31, 2014 showed that Bac Nam 79 Construction JSC held 10 percent of charter capital, Phu Nhuan Jewelry 7.7 percent, HCM City Party Committee Office 6.9 percent, Ky Hoa Trade and Tourism Co Ltd 3.78 percent, An Binh Capital JSC 2.73 percent and Phu Nhuan Construction and Housing Trading JSC 2.14 percent.

On August 14, 2015, it was decided that all DongA Bank’s shareholders must not transfer the bank’s shares as directed by the special control board.

The current board of directors of DongA Bank includes Nguyen Thanh Tung (chair), Nguyen Ngoc Tam, Nguyen Dinh Truong, Tran Van Dinh and Huynh Phuong.

Of these, Truong holds 66,583 shares (0.013 percent) and Dinh 700,000 shares (0.14 percent).

The individuals related to these individuals include Truong’s son, who has 21,541 shares (0.004 percent), Truong’s wife – Hoang Thi Xuan 5.07 million shares (1.015 percent) and his daughter 366,422 shares (0.004 percent).

Since the bank was put under the special control, DongA has not publicized its financial reports. The latest financial report released by the bank was in 2014.

The 2014 report showed that DongA Bank had total assets of VND87.1 trillion as of December 31, 2014, but its pre-tax profit was just VND26 billion, a sharp fall from VND328 billion in 2013.

Since then, information about the bank has been secret.

However, a source from DongA Bank in March 2023 exposed information about the bank’s operation in 2022, saying that the bank’s indicators had become more positive with mobilized capital equal to 98 percent of last year’s plan, while deposits had increased by 11 percent over the beginning of the year.

A DongA Bank report showed that the medium- and long-term deposits accounted for 42 percent of total deposits, thus helping it ensure sustainable capital to develop business activities, ensure liquidity and minimize risks. Its indicators about solvency were always higher than those required by SBV.

Meanwhile, in 2022, the outstanding loans were equal to 102 percent of the year’s plan.

DongA Bank has not made public its financial reports for many years, but it has been publicizing management reports periodically.

The 2022 management report, the latest report, showed that the board of directors carried out activities to stabilize operations of the bank and ensure liquidity. After many years of decline, the bank maintained growth in outstanding loans, improving its income.

The bank stepped up debt collection and restructuring with the principles of prudence, clarity and transparency. It has improved asset quality, and reduced unprofitable assets.

The bank’s managers keep a close watch over bond issuance by credit institutions and make investment in bonds to expand the list of valuable papers DongABank is holding, and to help use capital effectively.

Tuan Nguyen