ACB posts lower profit due to gold and forex loss

ACB posts lower profit due to gold and forex loss

Asia Commercial Bank (ACB) incurred an after-tax loss of more than VND158 billion (US$7.6 million) in the fourth quarter of 2012.

The loss pushed down its yearly profit to just VND928.4 billion ($44.4 million), the lender reported.

This figure represented a sharp decrease from the total net income of over VND3.2 trillion ($153.1 million) it earned in 2011.

The prosecution of several senior officers last August was one of the main reasons the bank failed to succeed in its business goals, deputy general director Nguyen Thanh Toai told the website VnExpress.net.

Toai said the bank’s profit target would be more modest this year but declined to disclose a specific number, as the target had not yet been approved by the board of directors.

In a recent filing to the Ha Noi Stock Exchange, ACB said most of its revenues declined last year, including the gold and forex business, which suffered the heaviest losses exceeding VND1.86 trillion ($89 million) in total.

Deposits last year also fell 12 per cent, reaching over VND125.23 trillion ($6 billion), while lending was unchanged compared to 2011, staying at VND102.8 trillion ($4.9 billion).

By the end of 2012, the bank’s total assets were more than VND177 trillion ($8.47 billion), a decline of 37 per cent from the VND281 trillion ($13.44 billion) it held at the end of 2011.

Its bad debt also rose significantly from 0.89 per cent in 2011 to 2.5 per cent by the end of 2012. The lender recorded potentially irrecoverable debt of VND1.15 trillion ($55 million), 3.9 times the bad debt of 2011.

Last year, ACB gradually withdrew its deposits at and reduced lending to other banks. By the end of 2012, the bank’s total deposits and loans to other credit institutions fell 73 per cent compared to the previous year, reaching nearly VND22 trillion ($1.05 billion).

Analysts believe the cautious move was due to the bank’s need to buy gold to pay gold depositors as well as concerns about a repeat of last year’s scams on the inter-bank market.

ACB still has a deposit of VND718 billion ($34.4 million) at another bank, but as this bank is under investigation for fraud, recovering this money “will depend on the decision of the Court”, the bank noted in its financial statement.

vietnamnet