“King bank shares” return

Last update 16:00 | 13/10/2017

VietNamNet Bridge – Bank shares, called ‘king shares’, have seen prices escalate to record highs after a period of decline. 

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Analysts say the time of the king share has returned.

Nearly 650 million shares of LienVietPost Bank (LPB) have been put into transactions on UpCom market since October 5. With the reference price level of VND14,800 per share, the bank has capitalization value of VND9.5 trillion, ranking 10th among listed banks.

LienVietPost Bank is the bank with the largest network in Vietnam with 130 branches and transaction points in 63 provinces/cities and 1,000 post transaction offices.

Bank shares, called ‘king shares’, have seen prices escalate to record highs after a period of decline. 

President Nguyen Duc Huong now holds 4.95 percent of the bank’s capital.

Prior to that, in mid-August, the investors’ attention was drawn to the listing of 1.3 billion VP Bank shares (VPB) on the HCMC bourse at the starting price of VND39,300 per share.

The listing has brought new billionaires to the stock market. VB Bank’s President Ngo Chi Dung, his wife and mother, who hold hundreds of millions of shares worth nearly VND10 trillion in total have been added on the list of the richest stock billionaires. Continue reading ““King bank shares” return”

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The financial picture of Vietnam’s 10 largest banks

Last update 10:04 | 17/02/2017

VietNamNet Bridge – Profits from lending still make up a large proportion of banks’ total profits, but bad debt remains a problem.

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Under a plan on applying Basel II standards on a trial basis, 10 commercial banks, namely BIDV, VietinBank, Vietcombank, Techcombank, ACB, VP Bank, MB, Maritime Bank, Sacombank and VIB, will finish the trial period in 2018.

Dau Tu Chung Khoan quoted Le Quang Hai, consultancy director of KTC Auditing, as commenting that the banks’ major income is still from lending.

VP Bank’s financial report showed its net profit in the first nine months of 2016 at over VND10 trillion, far higher than that of some commercial banks. The success is explained by the fact that VP Bank now owns a leading consumer finance company.

Profits from lending still make up a large proportion of banks’ total profits, but bad debt remains a problem.

VP Bank’s success in consumer finance could be a prompt for other banks to jump on the bandwagon. A joint venture between MB and a Japanese partner has been set up, while banks where the state holds controlling stakes are also considering joining the market.

Hai, after analyzing the financial reports of the 10 banks, found that VP Bank has the biggest margin between deposit and lending interest rates, 8 percent on average.

Meanwhile, the margin at Sacombank is 1.95 percent only.

The average interest rate gaps are now 3.3 percent for state-owned banks and 4.5 percent for joint stock banks.

However, at many banks, the proportion from non-credit activities has been increasing. Vietcombank had the lowest proportion of income from lending in the fourth quarter of 2016, at 74.6 percent.

Its net profit from services was as high as VND2.1 trillion. It had VND1.85 trillion from foreign exchange trade and VND1.939 trillion from other activities.

Sacombank and Techcombank, which are among the best joint-stock banks, also have low proportions of income from lending. Sacombank earned VND500 billion from forex trading in the first nine months of 2016, equal to that of Vietinbank and BIDV – the two big banks owned by the state.

VIB, Techcombank and MB are joint stock banks which have relatively high ratios of net profit on outstanding loans – 4.5-4.9 percent, while the figure is just 3.3 percent for state-owned banks.

Of the nine banks which have released their updated financial reports (Maritime Bank has only released the 2015 finance report), Vietcombank is the ‘cleanest’ bank as it has bought back all the bad debts it sold to VAMC some years ago.

Meanwhile, bad debts still burden other banks. Dien Dan Doanh Nghiep reported that BIDV had to make provision of VND9 trillion against risks for loans, which is equal to more than half of the VND17 trillion of profit.

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Thanh Mai