Investors rush to take capital back from banks

Feb 20th at 13:19

20-02-2013 13:19:54+07:00

Misfortune does not come alone. The banking sector, which has bogged down in the high bad debt ratio and big corporate governance problems is also facing the wave of investors’ capital withdrawal.

Injecting money in bank shares was considered a wise decision. However, the bad debt crisis and the wrongdoings found in 2012 have frightened investors. This explains why many of them have decided to withdraw their capital from banks.

The capital withdrawal plans have been carried out in quietness, simply because information exposition is not compulsory for banks.

The year 2012 witnessed 15 transactions of withdrawing capital from Sacombank, of which, five institutional investors and one individual investor took back all of their contributed capital. These include Bourbon Tay Ninh SBT (7.5 million shares), Ninh Hoa Sugar NHS (5,168,444 shares), Bien Hoa Sugar BHS (1,442,100 shares), Refrigeration Engineering Enterprise REE (42,139,266 shares). Especially, Australia and New Zealand Banking Group Limited, a big shareholder, transferred all its 103,256,415 shares, or 9.6 percent of stakes.

Local newspapers have reported that SRF has transferred 10,000 ACB shares, 6,110 Vietcombank shares and 114,592 OCB shares in a plan to restructure short term investment portfolio.

In a year-end press conference, ACBS announced that it has taken back all the investment capital from six banks, namely Dong A, Techcombank, Phuong Dong, MBB, Dai A Bank, Gia Dinh Bank.

SVC has also transferred all the 12.14 million OCB shares in a deal worth VND133.53 billion. Prior to that, Western Bank shares were transferred by SGT and KBC.

In principle, the capital withdrawal from banks would bring some disadvantages to businesses. Being shareholders of commercial banks, they would find it easier to access bank loans. Meanwhile, lacking capital proves to be their biggest problem for now.

However, the advantage in accessing bank loans seems to be not attractive enough to businesses, and they still decided to take back the investment capital.

A report showed that in 2013, SRF transferred all bank shares in its short term portfolio. The value of the transaction deals has been kept secret.

SVC was one of the rare investors who spontaneously provided information about the deal of transferring OCB shares (SVC was not a big shareholder of OCB). More than 12 million shares of the bank was sold by SVC at VND11,000 per share. It’s still unclear about the profit SVC made with the deal, but it clearly has had VND133.5 billion in cash from the share transfer deal.

In early 2012, SGT reported the deal of buying 18.8 million Western Bank shares worth VND302.1 billion, or VND16,060 per share. However, by the end of the third quarter, SGT had transferred all the shares to two individual investors at VND10,000 per share only.

In the third quarter of 2013, KBC announced the transfer of 26.55 million Western Bank shares it was holding, worth VND265.5 billion. The value of the deal was not revealed.

In most of the cases, the institutional investors who withdrew capital from banks did not make profits or took loss. However, the investors still had to make the share transfer because the affairs could help them arrange big sums of money which were really very helpful to them in the current circumstances.

Businesses all lack working capital to start their new production season, while it is very difficult to access bank loans. Even though the lending interest rates have been decreasing, businesses still cannot borrow capital because they cannot satisfy the banks’ requirements.