Vietnam made only US$13.2 billion in export revenue in the first half of April, down 19.2% compared to the second half of March, according to preliminary data from the General Department of Vietnam Customs.

The steep decline in export value was attributed to significant export drops in key product groups.

The export value of computers, electronic and component products fell by 25.2%, while that of mobile phones and components was down 23%. Iron and steel products also recorded a decrease of 21.7% in export value.

Vietnam’s total export value this year to April 15 reached US$92.5 billion, down 12% compared to the same period in 2022.

Some product groups dipped in export value, such as mobile phones and components falling by 15%, textile and garment products by 18% and wood and wood products by 30.3%.

Meanwhile, Vietnam spent only US$12.8 billion importing products in the first half of April, down nearly 11% compared to the second half of March.

Between January and mid-April, the total value of imports reached US$87.2 billion, sliding around 17% compared to the same period in 2022.

Among them, mobile phones and components decreased 65.3% in import value, while the import value of computer equipment, electronic products, and components fell by 13.2%.

Hong Kong budget carrier opens flights to Vietnam

Hong Kong budget carrier HK Express has launched an air route linking Hong Kong and Noi Bai International Airport in Hanoi.

The first flight on the route was conducted on April 28.

This is the direct and daily return route linking the two airports, using an Airbus A320. Each flight from Hong Kong to Hanoi takes around two hours.HK Express is the third international carrier to open international regular flights to Hanoi this year after Starlux Airlines and Xiamen Airlines, raising the total number of domestic and foreign airlines operating at Noi Bai International Airport to 53.

HK Express already has provided flights to Danang and Nha Trang.

Ministry urged to expedite preparations for North-South express railway project

The State Appraisal Council has proposed the Ministry of Transport develop a special mechanism for the North-South express railway project to quicken its construction.

The State Appraisal Council for the North-South express railway has written to the Ministry of Transport asking it to heed the consultancy’s opinions on the operation, route direction and location of stations to complete the prefeasibility study for the North-South express railway project.

Accordingly, the proposed express railway, for transporting passengers and cargo, is designed to have a maximum speed of 200 kph, as approved by the Ministry of Transport and the Ministry of Planning and Investment in late 2022.

Earlier, the Ministry of Transport proposed putting the whole project into service by 2050 in the prefeasibility study report.

However, the State Appraisal Council said that due to the project’s importance, the delay might lead to rising investment costs and missing socio-economic development opportunities.

Thus, the State Appraisal Council proposed the Ministry of Transport prepare a special mechanism for the project to submit it to the Government and the National Assembly for consideration.

With the cruising speed of 200 kph being revised down from 350 kph as earlier planned, the number of railway stations will increase.

The ministry is requested to work with 12 provinces that have yet to agree on the route direction plan and location of railway stations to reach an optimal solution.

Due to the urgency of the matter, the Ministry of Transport needs to expedite completing the prefeasibility study report for submission to the State Appraisal Council this year to ensure the project will be completed by 2045, as oriented by the Politburo.

The project, with a preliminary investment cost of US$61 billion, will have 50 passenger stations and 20 cargo ones on the entire route.

The Politburo has set a target to complete the investment policy approval for the North-South express railway project by 2025. Of which, the railway section of Hanoi – Vinh and HCMC – Nha Trang will be executed on priority in 2026-2030.

Garments and textiles sector cautious for 2023

Businesses in the garments and textiles sector are being cautious in their business plans for 2023 amid diminishing total demand and rising inventory.
At several annual general sharerholdes' meetings held by the garments and textiles industry recently, 'prudence' has been the common theme.

Hanoi-based Garment 10 Corporation (Garco 10) has set targets of $182.6 million in total revenue and $4.78 million in pre-tax profit, down $16 million in revenue and $1.73 million in profit on-year.

The dividend ratio for 2023 is set at 15 per cent, compared to 18 per cent last year.

“Our company has had to recalculate our business plan with caution to suit the market situation,” said Than Duc Viet, CEO of Garco 10.

According to the chairman of Vietnam Textile Apparel Association, Vu Duc Giang, "When the market worsens, the cycle usually runs from between 12–14 months, but this time it is likely to last longer, potentially lasting 24 months in the worst-case scenario."

As the market has yet to show signs of rebounding, many operators in the sector are considering such worst-case scenarios, with a possible fall of between 30-40 per cent of order intake.

Danang-based Hoa Tho Textile Garment Corporation hopes to achieve $195.6 million in revenue and $8.68 million pre-tax profit this year, down 12.6 per cent and 41 per cent on-year respectively.

As the market has yet to show signs of rebounding, many operators in the sector are considering such worst-case scenarios, with a possible fall of between 30-40 per cent of order intake.
Dap Cau Garment Corporation, based in the northern province of Bac Giang, is no exception to the more cautious outlook running throughout the sector.

According to general director Luong Van Thu, this year Dap Cau envisages just $17.4 million in total revenue and about $695,650 million in pre-tax profit, compared to $23.78 million and $1.06 million last year.

For Vinatex, this year the group aims to post similar revenues compared to last year of around $847.8 million, but its pre-tax profit is set at just $40.65 million, equal to 85.8 per cent of last year’s total.

During an online conference for the local industrial and trade sectors in mid-April, Lam Dong of the Department of Industry and Trade noted that garments and textiles firms face the most difficulties. Apparel processing firms are experiencing a low intake of orders from Europe and North America.

In the first quarter of this year, silk product exporters experienced a severe material shortage as there was a spike in raw cocoon prices.

In addition, several firms exporting to Central Asian markets have faced difficulties in paying their foreign partners, resulting in a pause in exports to the region.

“China’s reopening serves as a boost for our exports while creating more pressure for Vietnamese goods in the global market,” said Nguyen Cam Trang, deputy general director of the Agency for Foreign Trade under the Ministry of Industry and Trade.

Many forecasts and analyses by domestic and international organisations show that the global demand for garments and textiles would decline by 6-10 per cent in 2023, falling to around $710 billion, maybe as little as $690 billion.

These conditions make Vietnam’s target of $45-46 billion in total export value seem overly optimistic unless the global appetite for textiles and related products suddenly increases.

Cold chain sector to see increasing demand

The cold chain market in Vietnam has recorded active participation and expansion of both local and foreign investors. By 2026, the total designed capacity of cold storage in Vietnam is predicted to hit over 1.7 million pallets, with 23 projects scheduled to be completed from 2023 to 2026.
 
Fiingroup’s latest report reveals that the cold chain market in Vietnam has experienced robust growth, resulting in a 25.2 per cent surge in the designed capacity of cold storage facilities as well as the growing fleet size of cold transportation providers during 2020-2022, driven by increasing demand for cold storage facilities and transportation providers.

The market has been fuelled by the demand for seafood export, raw food imports, and domestic distribution, including modern trade retail and food services.

The report highlights that Vietnam's cold chain logistics market is estimated to be worth $203 million in 2022, with 75 commercial cold storage providers with a total designed capacity of over 1.0 million pallets and 31 professionally managed cold truck providers.

The market's dynamic growth has seen both local and foreign investors ardently participating and expanding their presence. By 2026, the total designed capacity of cold storage in Vietnam is predicted to hit over 1.7 million pallets, with 23 projects scheduled to be completed from 2023 to 2026.

Notably, the demand for cold chain logistics in Vietnam is driven by seafood export, raw food import, and domestic distribution, including modern trade retail, food service, and catering. Seafood exports, in particular, achieved a new milestone of $11 billion, registering a staggering 24 per cent growth rate in 2022.

Meanwhile, raw food imports continued their robust growth of 28.3 per cent during the review period. Moreover, the retail market experienced a vibrant development with a compound annual growth rate of 7.8 per cent from 2012 to 2022, with further growth predicted for the future.

The top 10 players in the market accounted for a significant proportion of the market share, with the top 10 cold storage providers and cold transportation providers having 49 per cent and 70 per cent of the market share, respectively. However, cold transportation has also witnessed fierce competition from small-scale providers, including individuals and household businesses owning one to three cold trucks.

Finally, the cold chain logistics sector experienced a dip in profitability from 2020-2021, owing to a surge in administrative expenses, with the sector's average net profit margin dropping from 6.6 per cent to 5.5 per cent. This was due to Covid-19 testing and the “3 on-site” production solution required to comply with the Vietnamese government’s pandemic prevention measures.

However, sector average profitability is expected to improve in 2022, given the increasing demand from robust seafood exports and the ease of pandemic restrictions.

BIDV becomes largest bank in Vietnam by total assets

BIDV has reported a 58 per cent on-year increase in pre-tax profit to over ($288.7 million) for the first quarter of 2023, according to the AGM on April 28.

As of December 31, 2022, BIDV's total assets have reached over $90.43 billion, representing a 20.8 per cent increase compared to the previous year, while credit growth increased by 5 per cent, with outstanding loans reaching over $68.8 billion.

Capital mobilisation increased by 2.3 per cent to reach over $72.2 billion, while the ratio of bad debts was controlled below 1.4 per cent.

This milestone makes BIDV the first bank in Vietnam to cross the $90 billion mark, solidifying its position as the largest bank in the country in terms of total assets.

Such a significant accomplishment is indicative of the astute financial management and adept strategic planning of this institution, which has resulted in substantial growth.

Furthermore, BIDV targets to increase its charter capital from $2.2 billion to $2.7 billion in 2023, and plans to issue over one billion shares.

One of the key issues that shareholders are concerned about is the impact of Circular 02/NHNN, which outlines the restructuring of repayment periods and the classification of debt for customers facing financial difficulties.

Chairman of BIDV's Board of Directors, Phan Duc Tu, has highlighted the importance of the circular, which has helped ease the financial burden on businesses and allowed them to access new credit sources. At the same time, it also helps banks reduce bad debts and risk provisions, which are expected to support businesses and the economy to overcome difficulties.

BIDV is closely monitoring and classifying its debts to ensure appropriate handling of the issue, and its management is still committed to the plan to issue private shares, despite the challenging market conditions.

The bank is currently in talks with potential investors and working with regulatory bodies to find the best fit for this plan.

Tu revealed that BIDV is still planning to do so and has contacted 38 potential investors. However, due to the unfavourable market, investor demand has deteriorated.

In terms of lending to the real estate market, BIDV's management has identified legal obstacles as the primary challenge facing this industry.

Overall, BIDV's impressive performance in the first quarter of 2023 demonstrates the bank's resilience and adaptability to challenging market conditions.

Leading businesses form council

Major domestic firms in the country have joined hands to launch the Vietnam Leading Business Council, a growth supporting initiative managed by the Vietnam Chamber of Commerce and Industry (VCCI).
The effort was part of the 60th anniversary of the establishment of VCCI, held recently in Hanoi.

The council, including 21 best-performing firms with renowned reputations and the VCCI Executive Committee membership, is aimed at supporting the operations of local enterprises and enhancing the country’s competitiveness on the global market.

Hanoi-based software maker FPT Corporation, HCMC-based automotive manufacturer Truong Hai Auto Corporation (THACO) and Vietnam’s leading lender Joint Stock Commercial Bank for Investment and Development of Vietnam, are among the group’s founders.

The council co-chairs are VCCI Chairman Pham Tan Cong, FPT Chairman Truong Gia Binh and THACO Chairman Tran Ba Duong.

FPT Corp and the council members are committed to offering tangible support that could fuel the expansion of Vietnamese companies.

HCMC: Amusement parks, shopping centers packed with visitors

On May 1, commercial centers, tourist areas, and other destinations in Ho Chi Minh City were crowded with visitors who came for entertainment and shopping.
 
Preliminary estimates from businesses indicate that the total number of visitors increased by 1.5 to 2 times compared to regular days.

Co.opmart Foodcosa supermarket on Quang Trung Street and Emart in Go Vap District both experienced a high volume of customers coming to buy food and consumer goods. Fast food restaurants in supermarkets were always jammed with customers.

At Aeon Mall, MM Mega Market, as well as Go! and BigC supermarkets, customers were also bustling about. Fresh fruits, seafood, carbonated drinks, and ready-made food were among the most popular items.

For Nguyen Van Tan's family, who resides on Tran Nao Street in Thu Duc City, commercial centers and entertainment spots near HCMC are always their top priority.

Supermarkets are expecting a 10 percent to 50 percent increase in sales compared to regular days. Currently, Go!, BigC, Aeon Mall, and other supermarkets are offering discounts ranging from 5 percent to 50 percent on over 1,000 products, including fresh and processed foods, various types of alcoholic and non-alcoholic beverages, and summer refreshing drinks.

According to travel agencies, there has been a significant increase in tourism during this holiday season. In addition to providing transportation for domestic tourists, companies are also busy welcoming foreign visitors to visit HCMC and other parts of Vietnam.

Ms. Doan Thi Thanh Tra, Director of Marketing and Communications at Saigontourist Travel, stated that during the five-day holiday, her company welcomed ten international tour groups to Vietnam by air and sea, bringing over 5,000 tourists from countries such as Germany, France, and Asian countries.

On May 2 and 3, approximately 1,000 German tourists will visit HCMC and participate in unique tours organized by Saigontourist Travel to explore the Mekong Delta.

Meanwhile, Vietluxtour Travel welcomed a group of Filipino tourists to the headquarters of the People's Council and the People's Committee of HCMC during this holiday season.

The number of visitors for entertainment at the Suoi Tien Cultural Tourist Area has increased sharply. According to Mr. Huynh Dong Tuan, Deputy General Director of the Suoi Tien Group, there were about 50,000 visitors during the first three days of the holiday.

The Son Tien Ecotourism Area, which belongs to the Suoi Tien Group in Dong Nai Province, also drew more than 10,000 visitors. Among them, Miracle Bay is particularly popular, featuring a "super water park" with artificial waves up to about 4 meters high, and guests are thrilled to try out 30 impressive water slides.

Number of tourists to Central Vietnam soars on national holidays

Provinces and cities in the central region saw a sharp increase in the number of visitors during national holidays thanks to the good weather and failing airline tickets.

As of 11 am on April 30, Than Tai Mountain Hot Spring Park in the central coastal city of Da Nangreceived more than 6,000 tourists, a three-fold increase compared to the previous day.

Son Tra Pennisula and Linh Ung Pagoda also attracted a huge number of holidaymakers.

In Hue City, the Traditional Craft Festival 2023 on Nguyen Dinh Chieu walking street along the Huong River and Hue Imperial City was also packed with local people, and domestic and foreign tourists.

Many groups of international visitors and students from schools in the city flocked to Thanh Tien paper flower-making village in Phu Mau Commune to learn about the traditional craft.

According to Director of the Department of Tourism of Thua Thien - Hue province, Nguyen Van Phuc said that most hotels, motels, and homestays in Hue City were full. The province is estimated to receive about 95,000 tourists visiting Hue on Reunification Day (April 30) and Labor Day (May 1). The total number of visitors who made bookings is estimated at 55,500.

Hoi An ancient town in Quang Nam Province welcomed around 5,000 tourists on the first days of the national holidays and is expected to receive 10,000 visitors in the five-day holiday from April 29 to May 3.

Besides a series of activities that have been organized every evening, the My Son Sanctuary in Duy Xuyen District is one of the destinations that lured a large number of people. The management board of the heritage site has improved the quality of tourist products to offer better services to visitors, such as increasing the number of electric vehicles carrying tourists around the site, arranging additional workers to serve travelers and help them purchase tickets with visa and scan QR codes as quickly as possible.
 
In Ha Tinh Province, thousands of travelers visited historical sites, religious places, and ecotourist areas on April 29-30.

According to Head of the Management Board of the Dong Loc T- Junction National Historical Monument Tran Dinh Uoc, about 5,000 people visited the relic site on April 30.

Xuan Thanh Beach also got 5,000 holidaymakers while the room capacity reached 60 percent.

In Binh Dinh Province, tourist attractions in Quy Nhon City, such as Eo Gio- Ky Co, Nhon Hai Island, Thi Nai Lagoon, Hon Kho Island, Tay Son Museum were crowded with visitors.

Additionally, Binh Dinh Tourism Festival 2023 which opened in Quy Nhon City on April 29, celebrating the 48th anniversary of the Liberation of the South and National Reunification (April 30) and National Tourism Year 2023 attracted over 30,000 visitors and locals.

Especially, a hot-air balloon festival themed “Quy Nhon, Binh Dinh – sea heaven” is organized for the first time on April 25 – May 5. Around 3,000-4,000, visitors have registered for scenic hot air balloon flights on April 28-30. However, the service can serve 200-500 passengers a day. The hot air balloon ride operator has got a license from the Department of Operations under the Ministry of Defense to fly hot air balloons. Passenger insurance alone is a total of VND100 million per person.

The functional departments have monitored hot air balloon flights and asked the operator to ensure the safety of passengers.

Northern border gates see bustling import and export during holidays

Over the past few days, on average, more than 1,000 trucks carrying import and export goods have been cleared daily at the border gates in Lang Son Province, facilitating trade between Vietnam and China.

Based on a recent report from the Management Board of Dong Dang Border Gate Economic Zone, over the past few days, on average, more than 1,000 trucks carrying import and export goods have been cleared daily at the border gates in Lang Son Province, facilitating trade between Vietnam and China.

The majority of the exported goods consist of fruits, agricultural products, and aquatic products. These goods pass through various border gates, including Huu Nghi, Tan Thanh, Coc Nam, Chi Ma, and Dong Dang.

Mr. Hoang Khanh Duy, Deputy Head of the Management Board of Dong Dang Border Gate Economic Zone, reports that import and export activities have remained robust and normal during the National Reunification Day and International Workers’ Day holidays this year, thanks to China's continuous import and export operations. The border gate's functional forces have arranged enough personnel on duty and developed plans for personnel, equipment, and other resources to facilitate swift customs clearance of goods without traffic congestion or truck turnarounds.

To address any difficulties or issues that may arise during the holidays, customs authorities and local authorities have established inspection teams at the border gates. The People's Committee of Lang Son Province has also assigned officials and public servants to handle customs procedures and monitor goods at the border gates during non-business hours, lunchtime, holidays, and extended working hours until 11 p.m. to ensure timely clearance of goods.

In the first quarter, due to China reopening its market, the total import and export turnover through the area increased by 31.96% compared to the same period.

Banks banned putting pressure on staff to sell corporate bonds

The State Bank of Vietnam asked financial institutions to review the consultancy, introduction and information provision of corporate bonds and investment fund certificates of credit institutions.

Accordingly, the State Bank of Vietnam required the financial institutions not to put pressure on its staff and business units to introduce and provide information for customers, and investors on purchasing corporate bonds and investment fund certificates to reach the set targets.

Particularly, credit institutions must ensure that their customers and investors need to definitely understand the difference between corporate bonds, investment fund certificates and deposit certificates along with arising risks and issues, especially the risk of not being able to pay interest and principal of issued corporate bonds and so on.

Besides, customers and investors must be aware of their interests and responsibilities, including self-assessment, self-responsibility for their investment decisions and bear the risks arising in the investment and transaction of corporate bonds; responsibilities of relevant agencies and organizations.

On the other hand, the State Bank of Vietnam also directed the financial institutions to strengthen checking and internal control with the activities of providing corporate bonds and investment fund certificates to timely detect, prevent and strictly handle the violations.

Vietnamese farm products sold locally and exported

Vietnamese agricultural products are being sold a lot in commercial centers, supermarkets, and convenience stores in the country and exported to European countries, the US, and Japan.

Some items are widely served on domestic and foreign flights; thereby, helping to improve Vietnamese agricultural products.

More than 90 percent of fruits and vegetables displayed in supermarkets such as Saigon Co.op, MM Mega Market, Central Retail Vietnam and retailers are Vietnamese kinds. At the present time, the program "Dong Thap Mango Week" is taking place at 48 supermarkets including GO!, BigC, and Tops Market (under the Central Retail Group of Vietnam) organized by the Department of Industry and Trade of the Mekong Delta Province of Dong Thap from now until May 17 with the aim to stimulate consumption demand and promote Vietnamese goods.

With a total area of ​​about 14,000 hectares, Dong Thap mangoes are widely supplied to provinces and cities. The special fruit of Dong Thap Province was exported to Europe, the US, Japan, and China and it took home VND2,700 billion (US$ 115,393,535). Most of the products are stamping traceability, meeting VietGap, GlobalGap standards or growing organically.

Ms. Nguyen Thi Bich Van, Communications Director of Central Retail Group, said that the program is expected to consume about 66 tons of mangoes, bringing the total consumption of Dong Thap mangoes this year to 200 tons. Currently, the supermarket system is offering discounts from 20 percent to 36 percent for the fruit as well as products processed from mango, including mango smoothies and pre-cut fruits. The selling price of Cat Chu mango is VND21,900 per kg and Hoa Loc kind is VND39,900 a kg.

Not only mango, but many other agricultural products such as lychee, durian, mangosteen, avocado, and sweet potato in provinces and cities across Vietnam are very well consumed in each season of the year at the distribution system, Ms. Nguyen Thi Bich Van informed.

The national airline Vietnam Airlines also actively brings Vietnamese specialty fruit products such as lychee, longan, and melon to serve on domestic and international flights to promote Vietnamese fruits to international visitors.

Previously, supermarket chains of Co.opmart, Co.opFood, MM Mega Market also simultaneously organized many other specialty fruit festivals to promote domestic products. Mr. Nguyen Ngoc Thang, Operational Director of Co.opmart, said that the supermarket has been purchasing goods from more than 200 suppliers in the Mekong Delta region, especially essential agricultural products for export.

In the past few years, brands such as Quang Thanh vegetable powder, Xuan Nguyen forest honey are not only known in the country but also in fastidious markets around the world. Ms. Nguyen Ngoc Huong, Director of Natural Import-Export Company in Cu Chi outlying district said that the products including Quang Thanh freeze-dried centella asiatica powder, lettuce powder, lotus leaf powder have been recognized as 4-star One Commune One Product (OCOP).

Although Vietnam is rich in agricultural products, the government necessarily works out a long-term strategy to successfully compete with other countries in the world. Mr. Nguyen Van Lan, a tour guide, said that he must understand guests’ tastes to give them different fruits. For example, he said, overseas Vietnamese visitors to Ho Chi Minh City like eating dried pineapple fish, Can Gio clams, water coconut molasses, Binh Chanh green skin pomelo while Vietnamese holiday-makers prefer durian, fresh or dried jackfruit to keep the same flavor and European travelers prefer slightly scented dried fruit. In addition, the packaging also needs to be presented so that it is attractive, well-preserved and environmentally friendly, said tour guide Nguyen Van Lan.

In a talk with SGGP Newspaper, a leader of a large retail group in Vietnam commented that Vietnam's specialty fruit flavors are competitive with other countries. But Vietnam doesn’t have eye-catching goods, especially products with intensive processing. Because the buyer just glances through the booth and makes a decision in about 3 seconds to choose or not. Agreeing with the opinion, Ms. Nguyen Thi Bich Van, Communications Director of Central Retail Group, said that domestic enterprises need to pay more attention to their products’ appearance.

Many industrial production projects to come into operation in Q2

In the next two months of the second quarter, several major projects in the processing and manufacturing industry are expected to be completed, creating additional capacity for industrial production.

According to recent data released on April 29 by the General Statistics Office of Vietnam, the Index of Industrial Production (IIP) for April is estimated to have increased by 3.6 percent compared to the previous month and by 0.5 percent compared to the same period last year.

Generally, the IIP for the first four months of this year is estimated to have decreased by 1.8 percent compared to the same period last year. In the same period in 2022, it increased by 7.8 percent. The mining industry saw a decrease of 2.8 percent, down 0.5 percentage point decrease in the overall index; processing and manufacturing also decreased by 2.1 percent, resulting in a 1.5 percentage point drop. On the other hand, electricity generation and distribution edged up by 0.5 percent, contributing 0.1 percentage points; water supply, waste, and wastewater management and treatment surged by 5.5 percent, contributing 0.1 percentage points.

By region, the IIP in the first four months of this year increased in 52 localities and decreased in 11 localities compared to the same period last year.

The number of employees working in industrial enterprises as of April 1 inched up by 0.7 percent compared to the previous month and fell by 3.5 percent compared to the same period last year.

Despite the challenges, there are also positive signs, as indicated by the above figures. It is anticipated that several large projects in the processing and manufacturing industry will be concluded in the remaining two months of the second quarter, leading to the creation of new capacity for industrial production.

The food production and processing industry is set to finalize the construction of a cattle feed factory in Ca Mau Province, capable of producing 125,000 tons of feed per year.

In addition, the metal product and machinery manufacturing industry is expected to complete the construction of an aluminum production plant in Hai Duong Province, with a capacity of 150,000 tons of products annually. Furthermore, four mechanical equipment manufacturing plants will be completed in Quang Ninh Province, with a total designed capacity of over 8 million products per year.

The transportation manufacturing industry is expected to finalize the construction of two factories: the Kim Long Motors production and assembly complex in Thua Thien Hue Province, capable of producing 1,000 units per year, and a factory in Quang Ninh Province for the production of household appliances and electric bicycles, with a capacity of 610,000 units per year.

Green loans flow into environmental projects

The flow of green credit has seen many positive changes in the past time when more and more banks have provided green lending for projects on the environment, clean agriculture, and wind power production.

The State Bank of Vietnam (SBV) has implemented many solutions to direct credit capital flows into green and environmentally friendly projects; thereby, contributing to the implementation of the national strategy on green growth and sustainable development.

Commercial banks have also been giving loans for "green" projects. In addition to their resources, many commercial banks have actively cooperated with international financial institutions and organizations to obtain large capital sources to promote green credit lending with more preferential interest rates.

For instance, in March 2023, Vietcombank and JBIC Bank (Japan) signed a cooperation agreement to provide US$300 million financial support for renewable energy projects. Mr. Nguyen Thanh Tung, General Director of Vietcombank, said that Vietcombank always dedicates special resources to finance green projects. Specifically, the bank successfully deployed a credit package of US$200 million for this field in 2019.

BIDV also said that it has reserved a certain proportion of loans for customers in the green energy field with about 1,718 projects. Mr. Tran Long, BIDV's deputy general director, said that the bank currently does not finance coal-fired power projects but promotes credit lending in the field of renewable energy.

By the end of 2022, BIDV's green credit outstanding balance reached nearly VND 63.8 trillion (equivalent to US$2.7 billion), accounting for 4.3 percent of BIDV's total outstanding loans and 13 percent of the total outstanding loans of the national economy. To meet the capital needs of the energy industry, in addition to normal business capital, BIDV has successfully mobilized many capital sources from international organizations such as WB and AFD.

"BIDV's loan portfolio for green and sustainable fields by 2025 is expected to reach US$3 billion, accounting for about 5 percent of BIDV's total outstanding loans," Mr. Long committed.

Based on its commitment to supporting Vietnam's agriculture to cope with climate change, Agribank has implemented a preferential credit program for clean agriculture with an unlimited capital scale, initially at VND50,000 billion since 2016.

By the end of 2022, lending sales reached more than VND30,000 billion, outstanding loans reached more than VND 5,000 billion with nearly 4,000 customers. Currently, Agribank has always devoted capital to green agricultural fields.

Not only in the "Big 4" banks – the four largest commercial banks including Agribank, BIDV, Vietcombank, and Vietinbank, reputable private commercial banks have also attracted large capital sources from international organizations to "green" credit. Specifically, by the end of 2022, the International Finance Corporation (IFC - under the World Bank) disbursed a loan of US$150 million with a term of 5 years to VPBank so that the bank can support lending to priority areas, including many projects in the field of environment and combating climate change in Vietnam.

Previously, IFC and other international sponsors granted VPBank a green credit worth US$212.5 million. Currently, VPBank has issued a Green Credit Framework to provide a process for using and managing green loans for projects that meet green criteria.

Similarly, IFC and 5 other international investment funds have also expanded the credit package to support SeABank from US$150 million to US$220 million for this bank to increase lending to small and medium enterprises as well as other climate change projects.

However, the SBV also acknowledged that, despite the impressive average growth rate, there are still many difficulties affecting the growth of green credit. Green credit growth in Vietnam has remained limited due to the lack of a clear legal framework, according to industry insiders. Specifically, there are currently no national regulations on criteria and a list of green projects for industries and sectors according to the economic classification system, as a basis for commercial banks to determine green credit in the next period.

Agribank's representative said that when the bank is giving loans for clean agricultural projects in many localities, it is difficult to identify what are clean agricultural models because there are no common criteria. In addition, many commercial banks complained that the granting of clean credit required specialized technical factors on the environment, making it difficult for credit officers to appraise and evaluate the project's effectiveness and customers’ ability to repay loans not to mention the difficulties in monitoring and managing risks when granting credit due to the lack of regulations, criteria and standards for evaluating tools to measure environmental impacts.

In fact, green projects often have long payback periods and large investment costs, so there should be guidance on green lists and criteria for identifying green projects in accordance with Vietnam's economic sub-sectors serving as a framework for credit institutions to have assessment and supervision when granting green credit.

Ms. Michele Wee, General Director of Standard Chartered Bank Vietnam, said that the legal corridor is an obstacle to accessing green capital for Vietnamese enterprises. Therefore, if the management framework is standardized and publicized, banks will have a clear definition of green projects; thus, banks will be easier to decide to lend what green projects. IFC also said that many commercial banks in Vietnam do not know how to operate the green financial mechanism, risk assessment, and green project procedures. Therefore, the SBV needs to give more detailed instructions to help credit institutions implement easily.

To solve the above-mentioned complaints, the State Bank said, the Circular 17/2022 guiding the implementation of environmental risk management in credit extension activities of credit institutions and foreign bank branches will take effect at the beginning of June 2023.

Currently, the Government is trying to complete the legal corridor on green credit. The draft decision of the Prime Minister promulgating regulations on environmental criteria and the certification of green credit and green bond issuance projects is also being urgently completed. It is expected that the above documents will create a legal corridor and create conditions for banks to promote green credit.

According to data from the Credit Department for Economic Sectors under SBV, in the period 2017-2022, the credit balance of the system for Vietnam's green sectors has an average growth rate of more than 23 percent per year.

By the end of 2022, credit outstanding for green projects reached more than VND500 trillion accounting for more than 4.2 percent of the total outstanding loans of the country’s economy, an increase of 12.96 percent compared to the end of 2021. Debts assessed for environmental and social risks reached more than VND 2,359 trillion, accounting for more than 20 percent of the economy's outstanding loans, up 27.69 percent compared to the end of 2021, with more than 1.2 million loans.

OCB retrieves all risky debts from FLC Group, Dai Nam Company

OCB has announced that it fully recovered the debts of its two major customers, FLC Group and Dai Nam Company, by collecting the entire outstanding amount and receiving collateral assets in lieu of the obligation to repay these debts. Stock Bank (OCB) in Ho Chi Minh City.

OCB has announced that it fully recovered the debts of its two major customers, FLC Group and Dai Nam Company, by collecting the entire outstanding amount and receiving collateral assets in lieu of the obligation to repay these debts. Both of these debts have already had a buyer and are allowed to make payments and sell to a third party.

On April 28, the 2023 Annual General Meeting of Shareholders (AGM) was held by Orient Commercial Joint Stock Bank (OCB) in Ho Chi Minh City. During the meeting, OCB reported on its business performance in 2022, outlined the business plan for 2023, and addressed other important matters.

In light of the current economic challenges, OCB's Board of Directors has deemed it necessary to increase the bank's charter capital to bolster its financial capacity and meet regulatory requirements regarding Capital Adequacy Ratio (CAR). OCB currently holds VND7.04 trillion in retained earnings, consisting of VND2.94 trillion from 2022 and VND4.09 trillion from previous years.

To facilitate business operations, the bank has proposed utilizing retained earnings and other sources of shareholder equity to increase its charter capital. The plan is to issue approximately 685 million shares to existing shareholders, which would represent a 50 percent ratio. If successful, the bank's charter capital will rise from nearly VND13.7 trillion to VND20.55 trillion.

Mr. Nguyen Dinh Tung, CEO of OCB, has responded to shareholder queries regarding non-performing loans (NPLs) from two of the bank's major clients, FLC Group and Dai Nam Company. He confirmed that OCB has fully recovered outstanding debts from both clients and has already sold off their asset portfolios.

At present, OCB is giving a third party some time to arrange payment. Concerning OCB's acquisition of the building at No.265 Cau Giay Street in Hanoi from FLC for investment purposes, the bank was unable to transfer the property title in 2022 due to FLC's financial difficulties. Consequently, OCB decided to terminate the contract, and FLC has since reimbursed the bank, including penalty fees, Mr. Tung added.

Mr. Trinh Van Tuan, Chairman of OCB's Board of Directors, responded to shareholder inquiries about dividend distribution by stating that OCB had taken steps to distribute profits to shareholders immediately after the 2022 Annual General Meeting of Shareholders. OCB had completed the capital increase process in accordance with the procedural sequence, and it was approved by the State Bank of Vietnam.

However, the next step involves working with the State Securities Commission, which requires more detailed and complex documentation. Thus, the bank needs to provide additional information. To safeguard shareholder rights, OCB will consolidate profits from this year and the previous year into a single distribution instead of prolonging the payout period, he said.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes