C.bank denies rumors about Eximbank chairman’s arrest
C.bank denies rumors about Eximbank chairman’s arrest
The State Bank of Vietnam (SBV) has shot down swirling rumors that police have detained Le Hung Dung, chairman of Vietnam Export Import Commercial Joint Stock Bank (Eximbank).
Speaking to the Daily on August 17 a central bank leader dismissed as baseless the rumors. He said the central bank had yet to place Eximbank under special surveillance since results of the central bank’s inspection of this HCMC-based bank are not yet available.
The communications department at Eximbank told the Daily said Dung had been working normally in recent days and that Eximbank had not been put under special surveillance by the central bank.
The rumors about the Eximbank chairman’s detention come after the central bank put DongABank under special surveillance last Thursday as part of the central bank’s plan to restructure the ailing bank based in HCMC, and protect the interests of depositors.
However, the rumors hit all bank stocks on August 17, with EIB of Eximbank plunging to a six-month low of VND12,600 per share.
Trading on the stock markets was normal on August 17 morning when the VN-Index and the HNX-Index fell slightly against the previous sessions. But the two indexes tumbled at the start of the afternoon phase, with the banking sector experiencing the sharpest drop.
Apart from EIB, VCB of Vietcombank lost VND2,000 per share while ACB of Asia Commercial Bank, BID of BIDV and CTG of VietinBank fell by over VND1,000 per share each.
At a general meeting in HCMC late last month, Eximbank’s shareholders expressed concerns over the bank’s declining profit and rising bad debt ratio. They had reason to worry as the SBV has yet to approve the list of the bank’s candidates for the board of directors in the new term.
A leader of Eximbank told the Daily that the SBV would assign its people to sit on Eximbank’s board of directors and at the same time weigh the candidates suggested by Eximbank. Eximbank plans to organize an extraordinary general meeting in mid-September to elect senior executives.
From now until the meeting, the bank’s board members will remain unchanged.
Eximbank’s profit has dipped sharply over the years. It obtained after-tax profit of some VND3 trillion (US$135.7 million) in 2011, VND2 trillion in 2012, VND658.7 billion in 2013 and a mere VND57 billion last year.
Pham Huu Phu, general director of Eximbank, said the bank had taken measures to cope with bad debt and this was the main reason behind the strong decline in profit. This year, Eximbank plans to sell VND2 trillion of bad debt to Vietnam Asset Management Company (VAMC).
This means risk provisions will increase, thus eating into Eximbank’s profit. In the second quarter of 2015, the bank posted after-tax profit of VND27 billion.
Phu said NamA Bank and Eximbank were not in merger talks as rumored. In addition, NamA Bank does not own a big stake at Eximbank, so it cannot acquire the latter.
