ACB-related firms divest $215.9 million from Kienlong Bank, Eximbank
ACB-related firms divest $215.9 million from Kienlong Bank, Eximbank
A group of companies related to Asia Commercial Joint Stock Bank (ACB) have withdrawn some VND4.5 trillion worth of capital previously invested in two other banks, said a senior official of the bank.
They have taken back some VND4.5 trillion ($215.9 million)through divestment from Kien Long Commercial Joint Stock Bank (Kienlong Bank) and the Vietnam Export-Import Commercial Joint Stock Bank (Eximbank), Tran Hung Huy, chairman of ACB’s board of directors, told Thoi Bao Kinh Te Sai Gon newspaper.
In addition, the board will seek its shareholders’ approval of a 10 percent cash dividend payment for 2012 in its extraordinary shareholders' meeting to be held in December, he added.
The payment will be deducted from the bank’s reserve fund, which has around VND2.4 trillion in cash, according to ACB's third quarter financial report.
As the bank has realized that its investment policies are on the wrong track, the divestment from the banking sector is not purely due to the profitability issue, but it is an investment strategy adjustment, he added.
ACB’s Q3 net income reached VND1.61 trillion, down 3 percent compared to the same period last year, according to its third quarter financial report.
In the first nine months of this year, ACB’s net profit reached more than VND5.34 trillion, an increase of 13 percent over the same period in 2011.
But its foreign exchange and gold trading activities brought in a VND1.144 trillion net loss in the third quarter and a 9-month loss of VND1.251 trillion.
During the same period in 2011, ACB only lost VND187 billion in foreign exchange and gold trading activities.
With the loss, ACB’s pre-tax profit in the first 9 months of year was only VND1.187 trillion, Tran Mong Hung, one of the founders of ACB, told newswire Vnexpress. Hung is the father of Tran Hung Huy, chairman of ACB’s board of directors.
According to Hung, the losses stem from the fact that the bank had to buy gold in accordance with the regulation of the State Bank of Vietnam to offset the gold sourced from its gold reserve for lending.
As the local gold price has recently been VND2-3 million a tael more expensive than its world counterpart, the price gap also contributed to the losses.
As of the end of October, ACB’s gold reserve was still negative, with just over 100,000 taels, and the bank would be able to return the reserve’s status to positive before November 25 as prescribed by the central bank.
The bank as also set aside enough loan loss provisioning as required by SBV, Hung said.
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