VCB posts 31% profit rise
VCB posts 31% profit rise
The Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) has reported VND2.68 trillion (US$119 million) as its pre-tax profit for the third quarter, marking a yearly increase of 31 per cent.
That helped the largest market-capitalisation bank record a total pre-tax profit of VND7.9 trillion in the nine-month period, an increase of 25 per cent from the previous year’s figure. The bank has now met 86 per cent of the target it set for 2017.
The strong increase in Vietcombank’s pre-tax profit was attributed to the healthy growth rates of financial services (24 per cent), core business activities (9 per cent) and other activities (29 per cent).
The bank was able to keep its provision for credit losses stable at VND4.5 trillion, nearly unchanged compared to the same period of last year.
After the first three quarters, Vietcombank had total assets of VND898.5 trillion, mobilised capital of VND688 trillion and a lending amount of VND536 trillion.
These figures increased by between 14 per cent and 16 per cent on an annual basis.
The ratio of bad debts during the nine-month period was 1.15 per cent, down from 1.51 per cent made at the end of last year, thanks to the decline of loans that are classified as sub-standard debts and potentially-irrecoverable debts.
Credit institution’s loans are divided into five categories of debt in accordance with regulations issued by the State Bank of Viet Nam in 2013.
In addition to the two types mentioned above, the other three are standard debts, attention-needed debts and doubtful debts.
Shares of Vietcombank, listed on the HCM Stock Exchange under code VCB, fell 2.2 per cent to close Monday at VND39,900 per share. The bank’s share price has gained a total of 8.7 per cent in the last month.
Reduced cross-ownership in financial units
Vietcombank plans to sell its entire stakes in the HCM City-based Saigon Bank for Industry and Trade (Saigonbank) and Viet Nam Cement Finance Company (CFC) on November 20.
The bank obtained approval of the State Securities Commission for its share sales in the two financial units on Friday. The divestment plan was approved by the bank’s management board in late August.
Vietcombank will auction entire 13.2 million shares or 4.3 per cent of total capital in Saigonbank at the starting price of 12,550 per share.
It also plans to sell all of its 6.6 million shares, equal to 10.91 per cent stake in CFC, at the starting price of VND11,549 per share.
The deals are expected to generate roughly VND242 billion for Vietcombank and help it comply with the SBV’s circular 36 on regulations for the operation of finance-credit institutions in Viet Nam.
According to the combined nine-month financial report of Saigonbank, the southern financial institution posted a pre-tax profit of VND231 billion, a yearly increase of 25 per cent and equal to 85 per cent of its 2017 targeted number.
However, Saigonbank had a higher non-performing loan ratio, which increased to 2.75 per cent from 2.63 per cent at the end of 2016, nearly hitting the limit of 3 per cent set by the SBV.
For 2017, Saigonbank plans to record VND270 billion in pre-tax profit – an annual rise of 55 per cent – and a 5 per cent dividend payout rate for shareholders.
CFC has not released its nine-month financial report. According to the company’s audited six-month financial report, CFC posted VND5 billion in pre-tax profit – down 50 per cent from last year’s number.
Besides CFC and Saigonbank, Vietcombank also wants to offload its entire 5.07 per cent ownership in Orient Commercial Bank (OCB).
Vietcombank is also holding stakes in two other financial units, which are Viet Nam Export and Import Joint Stock Commercial Bank (Eximbank) (8.19 per cent) and Military Commercial Joint Stock Bank (MBBank) (7.16 per cent).
At its annual general shareholder meeting held in April 2017, Vietcombank’s management board proposed shareholders approve its plan to divest from Eximbank with the hope of receiving VND700 billion.
The management board also proposed to keep its ownership in MBBank unchanged as the military-owned bank has been operating efficiently and making instant yearly dividend payouts.
