SHB’s bad debts ratio after merger at 8.69pct

Aug 13th at 13:16

13-08-2012 13:16:15+07:00

After taking over Hanoi Building Commercial Joint Stock Bank (Habubank-HBB), Saigon Hanoi Commercial Joint Stock Bank (SHB) plans to sell partly shares of Habubank in Habubank Securities Joint Stock Co (HBBS) and change the name of this securities company to SHBS.

At the press conference to announce the State Bank of Vietnam (SBV)’s decision on merger between Habubank-HBB and SHB on August 9, SHB’s general director, Nguyen Van Le, said that after the merger with Habubank, the bad debt ratio of SHBis 8.69%.

Particularly, bad loans of Habubank were 3.729 trillion dong, accounting for over 33 percent of Habubank’s total loans, including bad debts of the Vietnam Shipbuilding Industry Group (Vinashin).

Le also said that SHB expects credit growth this year at 13-15%. Explaining more about the capital adequacy ratio (CAR) after the merger at 11.39%, SHB’s general director said that, as of June 30, SHB’s CAR was 14.45 percent and that of HBB at 4.24%, therefore, after calculation, the CAR of the merged bank will be 11.39%.

For Habubank, the CAR is calculated basing on the amount of capital Grade 1 with 524 billion dong, capital Grade 2 at 184 billion dong. The capital Grade 1 is based on deducing the overdue debts of Vinashin.

SHB has its securities company but this securities firm is not a subsidiary of SHB as SHBholds only 10 percent stake in SHS. Habubank has its securities arm (with about 98 percent stake). After the merger, SHB will submit the State Securities Commission (SSC) a plan to maintain Habubank Securities Company as a subsidiary but the roadmap is to partly sell shares of Habubank in the securities arm to reduce the holding, Hien said.

Habubank Securities Joint Stock Co (HBBS) will also change name to Saigon Hanoi Securities Co (SHBS), similarly the change of bank name from Habubank to SHB.

Hien said that in the first step, SHB will have to spend about 2.1 billion dong to rename Habubank to SHB on transaction office names of Habubank. In addition, SHB will calculate the efficiency of each unit of Habubank because currently, there are some units of Habubank being located nearly office sites of SHB.

Earlier, according to the fiscal statement in the first six months of SHB, the bank’s bad debt ratio as of June 30, 2012 was 2.52%. The bank gained after tax profit of 441 billion dong, rising 41 percent over the same period last year.

Meanwhile, according to the consolidated report of HBB, as of March 30, 2012, the bank’s bad debt ratio was 9.74 percent and consolidated after tax profit was only 30 billion dong, down 77 percent on year.

Currently, Habubank has not announced its fiscal statement in the second quarter of 2012 yet