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Tag: Finance

  • Vietnam banks aim for high profit in 2017

    Vietnam banks aim for high profit in 2017

    At the AGM on March 25, LienVietPostBank’s shareholders agreed on this year’s development plan, aiming to reach US$66.2 million in pre-tax profit, 10 per cent higher than that of 2016 (US$59.5 million).

    Furthermore, the expected dividend rate was raised to 12%. LienVietPostBank also planned to raise capital from US$285.1 million to US$309.0 million by issuing 54 million shares.

    On April 10, VPBank organised its AGM. According to the AGM’s documents, VPBank’s pre-tax profit goal for this year is US$300.2 million, 38% higher than that of 2016.

    Its total assets are expected to reach US$12.4 million and total outstanding loans and corporate bonds US$8.9 million.

    With this expected total outstanding loan volume, to ensure the capital adequacy ratio (CAR) of 9% stipulated the State Bank of Vietnam (SBV), VPBank’s total capital must reach at least US$794.5 million.

    With its current owner’s equity of VND15.4 trillion (US$679.8 million), VPBank must increase capital by US$132.4-176.6 million.

    Techcombank’s documents for its AGM on April 15 showed that the bank is aming to increase consolidated pre-tax profit by 26% over 2016’s US$221.6 million.

    This year, Techcombank planned to increase its chartered capital by US$220.7 million (from US$391.9 million to US$612.6 million), and raise its total assets to US$12.4 billion.

    Other banks also expect great increases in profit. For instance, at its AGM on April 21, HDBank plans to get shareholders’ approval on the US$72.5 million pre-tax profit target, 28% higher than that of 2016.

    Meanwhile, OCB is planning to aim for US$34.4 million at its AGM, 60% higher than the previous year. Also, Vietcombank’s board of directors has set a goal to reach US$406.1 million in pre-tax profit, a 12% increase on-year.

    Well-founded optimism

    These ambitious figures in expected profit correspond with the results of the survey on business trends in the second quarter of 2017 for credit institutions and foreign bank branches in Vietnam, which was conducted by the Monetary Forecasting and Statistics Department of the SBV.

    According to the results, 89.5% of the credit institutions reported improvements in the first quarter of 2017. 90.4% of the institutions expected great increases in pre-tax profit compared to 2016.

    The expected average increase for the whole system is much higher than that showed in the survey in December 2016 (+ 13.4%).

    The banks’ optimism is due to domestic economic circumstances and good forecasts for the industry.

    According to the report on the economic situation in the first quarter of 2017 and forecasts on the fiscal year conducted by National Financial Supervisory Commission (NFSC), aggregate demand will improve in the upcoming time since directions from the government have initiated major increase in public investments in several key projects and capital disbursement in the application of high-tech agriculture projects.

    This positive attitude is also due to the fact that, despite the recent wake of US protectionism, based on the economic optimistic potential of the US and the globe at large, the International Monetary Fund (IMF) has forecasted the trade growth of Emerging Markets and Developing Economies at 4% in 2017, higher than the estimated 1.9% for 2016.

    A senior leader of the SBV shared with VIR that the bank would adjust the interest rates flexibly, in correspondence to macroeconomic indicators, inflation, and the currency market.

    Also, SBV would continue directing credit institutions to balance their capital and interest rates, economise operating costs, and increase business efficiency to lower interest rates.

    SBV continues its policy on operating currency rates flexibly, closely following the interbank foreign exchange market, the currency rate on the global market, economic and currency balances, and the monetary policy.

    It would also introduce measures to improve credit quality, focus lending on manufacturing and prioritised areas.

    “We would closely inspect the credit granting situation in some industries and fields that have high chances of risk, such as medium-long term credit, credit for large customers, credit for real estate, as well as BOT and BT transportation projects,”, the senior leader shared.

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  • Maybank CEO Farid becomes Maybank Indonesia president commisioner

    Maybank CEO Farid becomes Maybank Indonesia president commisioner

    Maybank Indonesia Tbk on Monday announced the appointment of Malayan Banking Bhd (Maybank) group president and chief executive officer Datuk Abdul Farid Alias as its new president commissioner (similar to a chairman’s position).

    Maybank Indonesia head of corporate communications and branding, Esti Nugraheni, said in a statement that Abdul Farid was taking over from Tan Sri Megat Zaharuddin Megat Mohd Nor after an AGM held on Sunday accepted his resignation.

    The AGM also approved the appointment of Restiana Ie Tjoe Linggadjaya as director, succeeding Ghazali Mohd Rasad who completed his term of service.

    “The board would like to thank Tan Sri Megat and Ghazali for their dedication to Maybank Indonesia, and welcome the new members of our board of commissioners and board of directors,” it said.

    Maybank Indonesia also announced that the bank recorded a 71.0% increase in net profit to Rp1.95 trillion (RM3.3 billion) for the financial year ended Dec 31, 2016 compared with Rp1.14 trillion achieved in the previous corresponding year, despite the economic slowdown.

    Maybank Indonesia is one of the largest banks with 428 branches including Syariah branches and micro functional offices across Indonesia.

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  • Bank Rakyat appoints new MD and president

    Bank Rakyat appoints new MD and president

    Former Affin Bank group CEO and managing director Datuk Zulkiflee Abbas Abdul Hamid has been appointed Bank Rakyat’s managing director and president effective since yesterday.

    Zulkiflee, who has also served on the board of directors of Maybank Islamic, held the role of group CEO and managing director of Affin Bank from 2009 to 2015.

    On his plans for Bank Rakyat, Zulklifee said:“Give me a chance to explore what is available in Bank Rakyat. I might be able to provide a more comprehensive action plan after that as I have just begun my role as managing director and president of Bank Rakyat

    “I have large shoes to fill, but it is not an impossible task. With the team that I have, I should be able to come up with something soon,” he said.

    Zulkiflee has served on a number of industry committees, including as council member of the Association of Banks Malaysia as well as chairman of the audit committee of Malaysian Electronic Payment System or MEPS.

    He holds a Master in Business Administration and a Bachelor of Science in Marketing, both from Southern Illinois University, in the United States.

    Zulkiflee has served as advisory council member of the Insaniah Global Centre for Islamic Banking and Finance, member of the board of trustees of Yayasan Budiman UiTM, as well as treasurer of Tabung Pendidikan 1 Bilion.

    Bank Rakyat chairman Tan Sri Shukry Mohd Salleh said that the bank is looking forward to capitalising on Zulkiflee’s vast experience in the field of credit management, enterprise banking and corporate banking to grow the bank as an Islamic cooperative bank.

    Meanwhile, Bank Rakyat chief retail banking officer Mohd Shahril Isa has clarified that Bank Rakyat’s memorandum of understanding (MoU) signed with Bank Rakyat Indonesia (BRI) in February was only for the expansion of its remittance services.

    “The MoU is for cooperation works, not a merger.

    “We are not going to open a new business in Indonesia.

    “Instead, we are only expanding our remittance services to Indonesia by using BRI as our platform as BRI has a large network covering all the islands there,” said Shahril.

    Bank Rakyat’s remittance services in Indonesia will begin in the second or third quarter of the year.

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  • Bank Indonesia (BI) reported that lending grew 8.4 percent

    Bank Indonesia (BI) reported that lending grew 8.4 percent

    Bank Indonesia (BI) reported that lending grew 8.4 percent year on year (YoY) to Rp4,333 trillion in February 2017, or an increase compared to January 2017 at 8.2 percent YoY.

    Working capital loans (KMK) and investment loans grew by 11.8 percent YoY and 9.7 percent YoY, respectively, BI spokesman Tirta Segara stated in a written statement in Jakarta on Sunday, April 2, 2017.

    “KMK in February amounted to Rp2,042 trillion, whereas Investment Loans amounted to Rp1,119 trillion,” Tirta said.

    Bank Indonesia reported that working capital loans, particularly in processing sector grew by 8.2 percent YoY compared to 1.2 percent YoY in January 2017, and financial sector, such as real estate and services grew by 21.8 percent YoY compared to 13.5 percent YoY in January 2017.

    As for investment loans, according to BI, significant growth of 15.8 percent YoY in trade, hotel and restaurant took place in February 2017 compared to 10.9 percent YoY in January 2017. The financial sector, such as real estate and services, also grew by 15.9 percent YoY compared to 13.5 percent in January 2017.

    Moreover, Bank Indonesia noticed that micro, small and medium-sized enterprises (SMEs) grew significantly by 29.8 percent YoY or Rp946.3 trillion compared to 8.5 percent YoY in January 2017. “Lending growth in SMEs occurred in working capital and investment loans,” Tirta said.

    Meanwhile, property sector tumbled in February 2017 with 15 percent YoY growth or Rp706 trillion compared to January 2017 at 15.1 percent YoY.

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  • Malaysian stocks likely to inch higher next week

    Malaysian stocks likely to inch higher next week

    Bursa Malaysia is likely to trend higher next week, with the benchmark index inching towards the 1,780-level, supported by positive local economic news and the return of calmness after the sharp drop on Wall Street early last week.

    Affin Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said FTSE Bursa Malaysia KLCI (FBM KLCI) maintained its bullishness and stayed in higher territory as equity bulls remained largely unfazed by the increases in the US interest rate.

    “For the year-to-date, FBM KLCI recorded a total gain of 116 points, or 7.1 per cent, signalling more resilience and upside in the near term despite imminent Federal Reserve rate increases and doubts on US President Donald Trump’s fiscal reforms,” he told Bernama.

    On the local news, he said, Prime Minister Datuk Seri Najib Tun Razak’s statement that Malaysia gross domestic product would be higher than 4.2 per cent this year should be supportive for market sentiment.

    Nazri said this showed that the economy was growing more than double the rates the International Monetary Fund had predicted for advanced economies while showing that Malaysia was firmly on the path to become a high-income nation.

    On the technical front, he said, immediate uptrend supports for the index were at 1,700 and 1,730.

    However, a convincing breach above 1,760 resistance would mean that the FBM KLCI would aim for the 1,780 and 1,800 levels.

    On a week-to-week basis, the FBM KLCI increased 0.55 of-a-point to 1,745.75 from 1,745.20 last Friday.

    The FBM Emas Index rose 24.52 points to 12,365.86, FBMT 100 Index was up 20.7 points to 12,017.00 and the FBM Emas Syariah Index gained 45.52 points to 12,772.75.

    On a sectoral basis, the Finance Index added 8.08 points to 15,748.07 and the Industrial Index rose 8.43 points to 3,272.24.

    The Plantation Index was 4.94 points weaker at 8,156.67.

    Weekly turnover surged to 22.23 billion units worth RM15.24 billion from 19.39 billion units worth RM17.22 billion last week.

    Main Market volume narrowed to 14.74 billion shares valued at RM15.16 billion from 15.10 billion shares valued at RM16.53 billion previously.

    Warrant turnover rose to 1.23 billion units worth RM149.62 million from 1.22 billion units worth RM148.94 million last week.

    The ACE Market increased to 5.98 billion shares worth RM897.82 million from 3.0 billion shares worth RM523.39 million previously.

     

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  • UOB AM Goes For Tech Growth

    UOB AM Goes For Tech Growth

    Singapore’s UOB Asset Management has partnered with a prominent U.S fund manager to tap into the current enthusiasm around all things tech.

    UOB Asset Management (UOBAM) has partnered US-based T. Rowe Price International Ltd. (T. Rowe Price) to offer retail investors in Singapore the opportunity to tap the long-term growth prospects arising from technology and innovation.

    Under the partnership, UOBAM will invest in T. Rowe Price’s Global Technology Equity Strategy (the Strategy) through the United Global Technology Fund. This is the first time retail investors in Singapore would be able to invest in T. Rowe Price’s highly-rated technology portfolio.

    Exponential Growth

    In the ten years between February 2007 and February 2017, the Strategy has seen annualised returns of 15.39 per cent versus the benchmark MSCI All Country World Index Information Technology’s 9.08 per cent over the same period.

    «The role of technology has grown exponentially over the past decades to become an essential part of global economies and industries. I am pleased to bring on board T. Rowe Price, an accomplished partner with extensive experience in investing in the technology sector,» said Thio Boon Kiat, CEO, UOBAM.

    T. Rowe Price has been managing dedicated technology portfolios since 2000. As at 31 December 2016, the Strategy has $5.6 billion of assets under management.

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  • Some banks in Vietnam enter new rate race

    Some banks in Vietnam enter new rate race

    VPBank announced it has offered a rate of 9.2 per cent per year for five-year certificates of deposit. VietA Bank has also listed a high rate of 8.2 per cent per year for certificates of deposit with tenure of just six to 18 months.

    The rate at Sacombank is also at 8.2 per cent per year; however, it is applicable for certificates of deposit with tenure of 5-7 years.

    The rate is much higher than the average deposit interest rates offered by other commercial banks. Currently, State-owned commercial banks offer a rate of 6.5-6.8 per cent per year for long-term deposits, while it is 7-7.5 per cent at large-sized joint stock commercial banks and 8-8.2 per cent at small-sized banks.

    Analysts attribute the hike to factors such as the need for medium- and long-term funds to grow lending this year.

    Many experts anticipated the scenario and warned there would be rising demand for long- and medium-term funding after they saw the economy clearly recovering and the Government signing a series of bilateral and multilateral trade agreements, which is likely to increase businesses’ demand for funds.

    Another reason is that 80-90 per cent of deposits currently are short-term while demand for long- and medium-term loans is growing rapidly.

    State Bank of Viet Nam (SBV)’s HCM City branch reported that last year the ratio between short-term and long- and medium-term loans was 44:56 per cent. It is normally 50:50.

    In addition, SBV’s amendments to Circular 36/2014/TT-NHNN reducing the ratio of short-term deposits that can be used for medium- and long-term loans from the current 60 per cent to 40 per cent has caused deposit interest rates to rise.

    Besides this, the risk weight for loans to the real estate sector has also been raised to 250 per cent from 150 per cent since 2017.

    As a result, banks have been forced to hike interest rates on long-term deposits so that they have enough funds to provide long- and medium-term loans.

    Expert Bui Quang Tin said the interest rate hike would put pressure on the central bank’s monetary management this year, especially when the central bank has to meet the three targets of controlling inflation, keeping foreign exchange rate and interest rate stable.

    Tin was also concerned it would be hard for lending interest rate, especially medium and long term, to be steady in the wake of the deposit rate hike. Both lending and deposit rate would rise by roughly 0.5-1.5 per cent per year this year, he forecast.

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  • ANZ Vietnam to sell retail banking business

    ANZ Vietnam to sell retail banking business

    Three foreign banks and two domestic banks, which have not been named, were reported by SaigonTimes as being interested in acquiring the retail businesses of the 100 per cent foreign-owned bank.

    Last October, ANZ Group CEO Mr. Shayne Elliot was quoted as telling foreign media that the bank would look to exit its retail and wealth assets in the Philippines and Vietnam but had no plans to do likewise in Cambodia and Laos.

    “Further investments do not make sense for us given our competitive position and the returns available to ANZ,” he said.

    In the same month, Singapore’s largest bank, DBS Bank Ltd (DBS), acquired the wealth management and retail banking business of ANZ in five markets for $77.7 million more than the book value.

    The businesses acquired were in Singapore, Hong Kong, China, Taiwan and Indonesia, with total deposits of $1.2 billion, loans of $7.77 billion, investment assets under-management (AUM) of $4.6 billion, and total revenue of $582.7 million in FY 2016.

    They serve about 1.3 million customers, of which 100,000 are affluent and 1.2 million are retail customers.

    DBS, however, will not be allowed to acquire ANZ Vietnam’s retail banking business, according to a source, who added that the Singaporean bank is not among the five potential suitors.

    ANZ Vietnam was not available for comment at the time of writing.

    Last November, an ANZ Vietnam representative told local media there were no plans to sell its retail and wealth businesses in Vietnam but it would continue to examine ways to improve its retail and wealth operations.

    Regardless, the exit is reasonable given its modest figures for the first half of 2016.

    During the January-June period, interest income fell 17.3 per cent year-on-year to VND578 billion ($25.4 million) and fee and commission income was down 5.6 per cent to VND153.3 billion ($6.7 million).

    The bank would have made a loss if drastic changes in other income sources had not saved the day.

    From a net loss of VND21.7 billion ($953,000) during the first half of 2015, foreign currency exchange recorded a net gain of VND163.3 billion ($7.2 million) for the bank in the first half of 2016, securing an after-tax profit of VND176.8 billion ($7.7 million) as at June 30, up 30 per cent year-on-year. Its bad debt ratio rose to 1.25 per cent from 1.16 per cent as at the beginning of the year.

    ANZ Vietnam now has eight transaction offices in Hanoi and Ho Chi Minh City, providing Retail & Wealth, Consumer Finance, Corporate, Financial Institution, and Public Sector services to customers.

    Last year, the State Bank of Vietnam (SBV) withdrew the business license of the ANZ Banking Group Limited – Hanoi Branch (ANZBLG), which opened in 1993, at the request of the ANZ Group, to bring together the two entities of the bank operating in Vietnam.

    In 2009 the ANZ Group established a fully foreign-owned local bank called ANZ Bank Vietnam Limited and has since continued to operate the latter.

  • Indonesia’s BCA posts record annual profit, buoyed by tax amnesty

    Indonesia’s BCA posts record annual profit, buoyed by tax amnesty

    Bank Central Asia (BCA) on Monday reported an all-time high annual net profit, as Indonesia’s key tax amnesty programme helped to lower cost of funds for the country’s biggest lender by market value.

    BCA posted a 2016 net profit of 20.6 trillion rupiah (S$2.17 billion), up 14.4 per cent from a year ago. This was a record high and also slightly above an average estimate of 20.0 trillion rupiah from 21 analysts.

    Indonesia’s tax amnesty scheme, launched last July and aimed at bringing back billions of dollars stashed abroad by citizens, boosted the funds at BCA’s current accounts and saving accounts (CASA) in the second half of 2016, the bank said in a statement.

    “Tax amnesty funds were parked at CASA,” BCA President Director Jahja Setiaatmadja told reporters. “What’s positive is that our cost of funds is low because our interest rate is low.”

    However, some of those funds were only “transitioning” at BCA and would likely be placed eventually in assets including property and government bonds, Mr Setiaatmadja said.

    At the end of 2016, BCA’s gross non-performing loans (NPL) stood at 1.3 per cent, one of the lowest in Indonesia’s banking sector.

    BCA’s rival, Bank Mandiri, last month reported its lowest annual net profit in five years due to an increase in provisions. Mandiri’s gross NPL of 4.0 per cent was the highest since 2008.

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  • CIMB Niaga Syariah reports 165.5 percent rise in profit

    CIMB Niaga Syariah reports 165.5 percent rise in profit

    CIMB Niaga Syariah, the sharia unit of PT Bank CIMB Niaga Tbk recorded a 165.5 percent increase in its net profit to Rp305.43 billion in 2016 from Rp115.03 billion in the previous year.

    Director of the sharia unit of CIMB Pandji P. Djajanegara attributed the surge in profit to 40.2 percent rise in sharia financing to Rp10.21 trillion in 2016 from Rp7.28 trillion in 2015.

    “An increase was recorded in all business segments,” Pandji said here on Monday.

    He said the non performing financing (NPF) of the sharia unit of the bank dropped to 1.15 percent from 1.86 percent despite the surge in financing.

    “The performance of the sharia unit was in line with the management adoption of prudential banking principle while expanding its financing portfolio,” he said.

    In 2017, apart from expanding consumer financing, CIMB Niaga Syariah wanted to increase financing of business segment including corporation, micro, small and medium enterprises (UMKM) and commercial financing, he said.

    He said the sharia business is expected to account for 10 percent of the credits to be provided by PT. CIMB Niaga Tbk.

    The third party fund held by CIMB Niaga Syariah rose 40.2 percent to Rp10.63 trillion in 2016 from Rp7.58 trillion in 2015.

    Pandji attributed the increase in the third party fund partly to the status of the unit as a recipient of hajj pilgrimage payments including regular hajj and special hajj pilgrimage.

    CIMB Niaga Syariah has a product of hajj saving that includes hajj plan saving, and hajj pahala (merit) saving and iB Mapan Wakaf saving.

    With the financing and the third party funds , the assets of CIMB Niaga Syariah rose 40.34 percent to Rp12.78 trillion in 2016 from Rp9.11 trillion in 2015.

    The sharia unit contributed 5.45 percent to the total assets of Bank CIMB Niaga in 2016 , up from 3.90 percent in 2015.

    PT CIMB Niaga is the countrys fifth largest bank in assets controlled by the CIMB Group of Malaysia.

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  • DBS to launch mobile-only banking service in Indonesia

    DBS to launch mobile-only banking service in Indonesia

    The Development Bank of Singapore (DBS) plans to introduce a smartphone-based mobile banking option for the Indonesian market as a way to further digitalize the banks’ operations and utilize digital innovation to its advantage.

    Digital transformation is part of a larger agenda for DBS, seeing that the need for digitalization is no longer seen by the banking industry as a threat to its business but as a tool of cooperation to innovate services, said Bank DBS Indonesia’s head of digital banking, Leonardo Koesmanto.

    DBS will open a new mobile-only bank in Indonesia in the early part of the second quarter of 2017 to promote a more digital, branchless and signature-less experience for its customers in this market. The system will function through biometrics and will require the presence of an electronic ID (e-KTP) to register or use its operations.

    “We are taking the more scalable digital route because these days, bigger banks are shrinking their number of branches. With this investment we can serve more people more effectively,” Leonardo said on Wednesday.

    It is likely that DBS’s mobile-only banking option in Indonesia will be rolled out through a soft launch around next month, in order to assess the feasibility of the technology and root out teething faults. The idea has already been tried by DBS in India.

    DBS currently has around 30 physical branches in Indonesia. Leonardo commented that in order for banks to truly achieve growth in a market, they would need 300 to 400 branches.

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  • LuLu Financial Group expands Philippines footprint with remittance service

    LuLu Financial Group expands Philippines footprint with remittance service

    Abu Dhabi-based LuLu Financial Group, one of the largest retail conglomerates in the UAE, is expanding its presence in the Philippine remittance and foreign exchange industry.

    The move aims at encashing the strong economic ties between Middle East and the Philippines and the increasing number of the deployment of overseas Filipino workers in the region.

    A significant chunk of the nearly $30 billion sent home each year by almost five million expatriate Filipinos can be channeled toward more productive sectors like helping finance the government’s infrastructure buildup program, reported Inquirer.

    “The economic bond between the Philippines and the nations of the GCC are strong and getting stronger, given the large number of Filipinos working there and sending money back home,” LuLu Financial managing director and CEO Adeeb Ahamed had reportedly said earlier.

    He was referring to the GCC region, which played host to an estimated 2.2 million Filipino contract workers. About one-fourth of the yearly dollar remittance tally that helps boost the Philippine economy comes from this region, the report said.

    Ahamed was quoted as saying that this huge potential encouraged LuLu Financial to open its third foreign exchange and remittance office in the Philippines to better serve Filipino clients in its home region.

    LuLu Financial is a non-banking financial organization. It deals in foreign exchange, global money transfer and salary and wage administration. It has 132 branches worldwide, staffed by over 1,500 employees.

    Ahamed reportedly said the group had the physical network to be able to serve GCC-based Filipinos’ remittance needs close to their workplaces.

    He said the remittance business in the Middle East might already be crowded, but LuLu Financial’s ties with its parent gave it the advantage of being closer to its clients.

    Ahamed said it would be a good idea for the Philippines to try to harness the financial muscle of remittances from overseas Filipinos, similar to what the India had done.

    He reportedly cited the case of a major international airport in India which was built with funds raised from overseas Indian workers through retail placements of equity shares.

    “This was built using the public-private partnership model,” he said.

    “Funds were raised, airport was completed and the retail shareholders saw the value of their stocks rise sharply. This is something the Philippines can also do.”

    For starters, Ahamed was quoted as saying by Inquirer, it would be a good idea for the government to forge ahead with its plan to create a bank dedicated to serve the OFW community.

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  • Royal Bank of Scotland Ends Business Activities in Indonesia

    Royal Bank of Scotland Ends Business Activities in Indonesia

    Although the bank started under the name ABN AMRO BANK NV Indonesia, the majority of its shares was acquired by the Royal Bank of Scotland Plc in 2010. After this acquisition the bank’s name changed to RBS NV.

    Earlier, in December 2015, the bank’s branch in Surabaya (East Java) had already been closed. The ending of all of RBS NV’s business activities in Indonesia is part of the bank’s overall business strategy. Besides Indonesia, it decided to end its business networks in 24 other countries. Due to the RBS Group’s losses across the world, it decided to focus on the domestic market of the United Kingdom (UK) in order to improve its earnings. RBS NV’s corporate activities in Indonesia were profitable until the end of 2014. After that year its activities in Indonesia resulted in net losses and therefore it decided to end its businesses here gradually.

    Through OJK Board of Commissioners Decree No. 7/KDK.03/2017 on the Revocation of the Permit of The Royal Bank of Scotland NV’s Branch in Indonesia, dated 28 February 2017, the license of the bank has been revoked. According to the OJK, RBS NV Indonesia has completed all its obligations and therefore its request for the license revocation was approved. However, those who still (claim to) have rights and obligations with the local branch of Royal Bank of Scotland in Indonesia can contact the disclosure team, located at the Indonesia Stock Exchange (IDX) building (Tower 2, second floor) in South Jakarta until 31 March 2017.

  • Japanese, Vietnamese cooperation in finance, banking a successful marriage

    Japanese, Vietnamese cooperation in finance, banking a successful marriage

    Japanese enterprises in banking and finance are now the biggest foreign shareholders in Vietnamese banks, financial and financial leasing companies, and their Vietnamese partners highly regard their expertise and support.

    Recently, Sumitomo Mitsui Trust Bank (SMTB)—the largest trust bank in Japan with total assets of $585.4 billion—has bought 49 per cent of BIDV Financial Leasing Company and renamed it BIDV-SuMi TRUST Leasing Limited Company. The joint venture took place as an expansion of their strategic cooperation since 2013.

    According to a VIR source, another investor from Japan is negotiating to buy 49 per cent of VPBank Finance Company Limited (FE Credit). These two examples evidence Japanese investors’ attention on the Vietnamese financial market and Vietnamese banks’ interest in cooperating with them.

    Previously, Military Bank (MB) transferred 49 per cent of Mcredit Consumer Finance Company’s shares to Shinsei Bank and HDBank transferred 49 per cent of HDFinance’s shares to Credit Saison Co., Ltd. Le Huu Duc, chairman of MB’s board of directors, said the reason for the cooperation was that Japanese investors “have the advantage of modern technology and experience in consumer finance.”

    Because of the interest from Japanese investors and their strong finances, there are more cooperation deals in the making.

    Currently, numerous banks and financial companies in Vietnam, including giants like BIDV and soon maybe Agribank, are calling for investment from strategic foreign investors.

    Increasing cooperation with Japanese investors

    Besides transferring shares, a range of big Vietnamese banks also cooperate with Japanese banks to look for business opportunities as Japanese FDI is increasing.

    At the end of February 2017, BIDV signed a memorandum of understanding (MoU) on serving Japanese customers in Vietnam with Fukuoka Bank, the 16th biggest bank in Japan.

    Similarly, VietinBank and Vietcombank also signed dozens of MoUs with Japanese partners. In particular, Vietcombank signed with approximately 60 Japanese banks.

    Following the trend, other commercial banks also seek Japanese partners and have even established a new service called Japan Desk to support clients form Japan.

    Besides VietinBank, Vietcombank, and BIDV, Sacombank, HDBank, TPBank, and others offer this service.

    “There are more and more Japanese firms entering the Vietnamese market. The two countries have similar cultures and retail banking strategies, so the cooperation can promote both parties’ strengths and often results in high efficiency,” said a leader of Sacombank.

    Japanese clients require perfect and diversified services, while capital and the range of services in Vietnam is limited.

    One can expect an increasing trend of teaming up among Japanese and Vietnamese banks in the coming time. This will be beneficial for all parties.

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  • Techcom trust debuts on HOSE

    Techcom trust debuts on HOSE

    Techcom Việt Nam Real Estate Investment Trust (TCREIT) made debut on the HCM Stock Exchange (HOSE) yesterday under the code FUCVREIT at a par value of VNĐ10,000 (44 US cents) per fund certificate.

    Five million FUCVREIT fund certificates were floated on the southern bourse, without a specific due term for the fund’s being traded. Changes in the due term will be
    decided by investors’ resolutions.

    HOSE said in a statement that this was also the first domestic-invested fund in Việt Nam’s  securities market. The trust fund was founded by the Techcom Capital Co Ltd (TCC), an investment arm of Techcombank.

    Ending the first session, its price closed at VNĐ12,000 apiece with 8,330 fund certificates exchanged.

    The investment trust was founded as a closed-end fund with initial capital of VNĐ50 billion (US$2.22 million). The fund expects to increase its capital in the future to meet
    investors’ demands when targeting potential real-estate projects.

    By making investments in Techcom Capital’s property investment trust, domestic and overseas investors can indirectly own part of potential real-estate projects and receive
    constant earnings from those projects without spending money on direct investments in the projects.

    In addition, with the fund’s trading on HOSE, investors can buy and sell fund certificates more easily, compared to trading in a real-estate project.

    A REIT fund is founded by investors’ capital when they purchase fund certificates and authorise the fund management board to supervise their shares. A real estate
    investment fund often spends most of its net asset value (NAV) investing in real-estate projects and real-estate companies.

    The domestic real estate investment fund has a long-term investment strategy focusing on property projects, such as office buildings, hotels, resorts and shopping centres,
    which generate constant earnings for the fund from leasing and business activities.

    The fund will also consider making investments in projects, such as apartment buildings and housing, which are developed by reputable institutional developers and have high
    possibilities of price increases, to benefit from selling products in those projects.

    In Việt Nam, there are some foreign-invested real-estate investment trusts, such as Vinaland by the VinaCapital, VPF by the Dragon Capital and VPH by the Saigon Asset Management. These funds mobilise capital from overseas investors to purchase stakes in Việt Nam’s real-estate projects and property stocks, after which the funds will be
    listed on overseas stock exchanges.

    According to current regulations, of the total NAV, a REIT must spend at least 65 per cent investing in real-estate projects and property stocks and, at most, 35 per cent investing in other types of assets, such as deposits, bonds and securities.

    When the fund seeks capital via an initial public offering (IPO) and/or increases its capital, investors can purchase more fund certificates by making payments in cash or
    they can contribute their stakes in real-estate projects to receive the amount of certificates that are of equal value to the stakes in property projects.

    This could become a new tool to help investors offload their stakes from real-estate projects by selling their fund certificates, if the projects have low trading liquidity in the property market.