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Tag: Techcombank

  • Vietnam’s interest rate rises in the lead-up to biggest national holiday

    Vietnam’s interest rate rises in the lead-up to biggest national holiday

    Banks have hiked deposit interest rates by 0.1-0.5 percentage points as the country’s spending demand surges prior to Tet. Private lender Asia Commercial Bank last Friday introduced a new interest schedule with an increase of 0.2-0.3 percentage points in rates on most deposit terms. It also offers rates proportional to the amount of deposit. Techcombank, another of the larger private banks, since January 21, has hiked rates by 0.2-0.3 percentage points for terms of up to 12 months.

    Earlier, in mid-December most private banks had upped rates by 0.1-0.7 percentage points, while state-run banks increased them by up to 0.5 percentage points.

    However, there are also a few banks that choose to ‘go against the current’ by lowering deposit rates on same products. For instance, BIDV, Vietnam’s biggest lender by assets, has just lowered interest rates on its deposit rate schedule effective from January 22.

    BIDV’s 5-month savings is now 5.2 percent interest, down from its previously 5.5 percent which was its approved ceiling rate.

    Previously, at the end of December 2018, BIDV increased the 5-month term interest rate by 0.5 percentage points per year.

    On the same day, VPBank also reduced the interest rate on their 6-36 months terms by 0.1-0.5 percentage points.

    Specifically, the bank’s regular savings interest rate with 6-11-month terms is lowered by 0.2 percentage points, and is now 7 percent. The 12-month term interest rate is 7.05 percent; both 13 and 15 month terms are down 0.2 percentage points, and are now 7.2 and 7.4 percent respectively.

    However, VPBank still currently holds the highest single interest rate in the market of 8.6 percent for its 18-36 month fixed term savings.

    Experts believe that the negative adjustment of interest rates at some banks such as BIDV and VPBank may be for the purpose of restructuring to meet the banks’ individual capital needs, and does not yet accurately reflect the interest rate trend in the following months.

    In fact, the period before the Tet Lunar New Year holiday is when cash is still in high demand in the economy, as businesses need to withdraw money to pay bonuses and salaries, and people will withdraw cash to spend for Tet which will start from February 5.

    At the conference on tasks for the banking industry in 2019 on January 9, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said that banks have recorded a decline in deposits.

    According to him, this is a phenomenon that banks need to keep their eyes on, to determine where the flow of capital has gone, to real estate or production, or another channel in order to make reasonable adjustments to their plans.

    Tu said the SBV had adamantly stuck to its policy to stabilize interest rates despite very high pressure to drive rates upwards in 2018. Many small banks had raised short-term deposit rates to attract capital and improve liquidity, resulting in the central bank having to pump more money into the market or use other measures to limit and keep interest rates stable for businesses.

    The deputy governor said the SBV had to balance between the conflicting interests of banks, savers and businesses to come up with an appropriate interest rate for the whole market.

    The SBV targets credit growth of 14 percent this year, the same as last year. As a result, he noted, commercial banks will have to make better quality loans this year to avoid bad debt.

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  • Vietnam tops Southeast Asia in IPOs

    Vietnam tops Southeast Asia in IPOs

    Vietnam surpassed Singapore and Thailand to top Southeast Asia in initial public offerings (IPOs) last year, raising $2.6 billion. This figure was 3.7 times that of 2017, according to consultancy Ernst & Young. Two of three largest IPOs in Southeast Asia last year were launched by Vietnamese companies: $1.34 billion from Vinhomes, a real estate developer of Vietnam’s biggest private firm Vingroup; $923 million from Techcombank, the country’s largest private sector lender.

    However, an opposite trend was seen in Southeast Asia as a whole, with the money raised from IPOs dropping 34 percent over 2017 to $7.1 billion.

    The number of IPO deals in the region also decreased by 7 percent to 115, with 56 of them raising less than $10 million.

    Ernst & Young economist Max Loh said that the reason for this drop was U.S-China trade tensions, which affected the capital market in the region, as Southeast Asian countries have close trade relationships with China.

    Experts feel Vietnam has the potential to attract more foreign investments in the future. A report by law firm Baker McKenzie and consultancy Oxford Economics said that Vietnam will top the region in the amount of money raised via IPOs by 2021.

    The rise of Vietnam and other developing countries in Southeast Asia could intensify competition for new listings among the region’s exchanges, said Tham Tuck Seng, PwC Singapore’s capital markets leader.

    This will increase the pressure on Singapore to differentiate itself even more in order to stand out, CNBC quoted Tham as saying.

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  • Vietnamese banks register more than robust profit growth

    Vietnamese banks register more than robust profit growth

    Commercial banks in Vietnam have posted impressive growth, with profits doubling or even tripling over last year’s first nine months. The Bank for Foreign Trade of Vietnam (Vietcombank) has announced profit before tax (PBT) of VND 11.68 trillion ($502.16 million) in the first nine months, a 47 percent increase compared to the same period last year.

    In the private banking sector, the current profit leader is Techcombank, which reported a 9 month PBT of VND7.77 trillion ($334.2 million), an increase of 61 percent over the same period last year. Nearly all business lines at Techcombank saw positive growth.

    Pre-tax profit of lender ACB hit a record VND4.8 trillion ($206.3 million) in the 9-month period, 2.4 times higher than the same period last year.

    The highest growth rate of the period went to Vietnam International Commercial Joint Stock Bank (VIB), with its profit before tax of VND1.72 trillion ($73.9 million), marking an increase of 176 percent over the same period last year.

    Banks relied heavily on interest income to achieve these profits. For example, VPBank granted loans worth VND 211.09 trillion ($9.08 billion), up by 17 percent over the same period last year, and corresponding figures for Vietcombank were up 15 percent to VND 616.41 trillion ($26.5 billion).

    In addition, the banks have also gained positive results from the fee-for-services approach.

    According to banking experts, with strong credit growth at the beginning of the year and the economy forecast to remain stable, bank profitability is set to continue rising sharply towards the end of the year.

    In the last months of the year, many banks’ credit facilities have been running low, but this is balanced by rising interest rates that boost their net income.

    HSBC Vietnam CEO Pham Hong Hai said that profitability of the sector will peak in 2018 and gradually fall later. The central bank may not want to maintain such high credit growth in the near future, and could work to bring it down, he explained.

    The country’s banking sector posted an estimated 18.17 percent loan growth in 2017, according to the Ministry of Finance. It has targeted growth of 17 percent this year.

    Hai said that from 2019 onwards, bad debt may re-emerge as a problem for banks after the recent credit growth and the instability of the global financial markets. Therefore, banking profits will most likely see a downward trend next year.

    State Bank of Vietnam Governor Le Minh Hung said recently that bad debts and potential bad debts amounted to 8.61 percent of total credit by the end of September.

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  • Vietnam’s Techcombank shares drop 20 pct on debut

    Vietnam’s Techcombank shares drop 20 pct on debut

    Vietnam’s Techcombank saw its shares fall as much as 20 percent from their reference price on Monday, hitting the lowest trading limit allowed on a stock’s maiden day of trading.

    Techcombank, formally known as Vietnam Technological and Commercial Joint Stock Bank, raised $922 million in April in one of Vietnam’s biggest offerings, aiming to expand aggressively into retail banking to capitalise on booming demand for an array of financial services.

    The shares are allowed to move 20 percent higher or lower than the reference price on the first day of listing, according to exchange trading rules. In morning trade, Techcombank hit a low of 102,400 dong ($4.49), falling from its 128,000 dong reference price.

    Vietnam’s benchmark VN Index dropped 10 percent in April after touching a record high, prompting fund managers and strategists to warn valuations may have peaked. The index lost a further 7.5 percent in May.

    “We obviously can’t select what’s happening at the market when we come to listing,” Chief Financial Officer Trinh Bang said last week.

    The 25-year-old bank is seeing strong growth in services such as credit cards, auto loans and bancassurance. Its cornerstone investors included Singaporean sovereign wealth fund GIC Pte Ltd, Fidelity Management & Research and domestic fund Dragon Capital.

    Techcombank’s appeal stems from a boom in financial services while the economy expands at record rates.

    Vietnam reported annual credit expansion of about 18 percent for the past two years, with banks posting strong profit growth. A manufacturing boom spurred the export-dependent economy to grow 7.4 percent in January-March – the fastest first-quarter pace in a decade – after growing 6.8 percent in all of 2017.

    ($1 = 22,790 dong)

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  • Vietnam’s Techcombank readies for market debut after raising $922 mln

    Vietnam’s Techcombank readies for market debut after raising $922 mln

    Vietnamese lender Techcombank will list its shares on the Ho Chi Minh Stock Exchange next month, the bank said on Wednesday, making it the country’s seventh biggest firm by market value.

    Techcombank raised $922 million last month in one of the country’s biggest initial public offerings. Its cornerstone investors are Singapore sovereign wealth fund GIC, Fidelity Management and Research, and local fund Dragon Capital.

    The Hanoi-based lender said it would list on June 4 at a reference price of VND128,000 ($5.62), valuing the bank at $6.5 billion and making it Vietnam’s second-biggest listed bank after state-controlled Vietcombank.

    The shares will be allowed to move 20 percent higher or lower than the reference price on the first day of listing, according to exchange trading rules.

    Techcombank provides a broad range of banking products and services to more than 5.4 million customers in Vietnam through a network of 315 branches.

    The bank’s Chief Executive Officer Nguyen Le Quoc Anh said 2018 was a year of robust activity for Vietnam’s stock market as the economy showed strong growth momentum.

    “We believe this is a suitable time to list Techcombank after two years of preparation,” he said in a statement.

    Techcombank aimed to increase retail lending to 50-55 percent of total loans, up from 40 percent, in the coming years, while reducing the proportion of corporate loans, said Nguyen Xuan Minh, chairman of Techcombank Securities and head of Techcombank’s investment banking division.

    The bank aimed to increase its registered capital by nearly three times this year to better compete with regional rivals.

    “As the ASEAN Economic Community forms, our competitors are not only local banks but also banks from Thailand, Malaysia, Singapore. That’s our goal,” Quoc Anh said on Wednesday, referring to the group of Southeast Asian nations.

    Foreign investors own 22.5 percent of Techcombank. Vietnam limits foreign ownership in local banks to 30 percent.

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  • Techcombank to mobilize $220mn from shareholders

    Techcombank to mobilize $220mn from shareholders

    The content of its plan to does not, in general, differ from the previous version submitted to the annual general meeting (AGM), but the offering period is expected to be extended to all of 2017, from only the second and third quarters.

    500 million shares are to be issued at a minimum price of VND10,000 ($0.44) per share. If the deal is successful, Techcombank’s charter capital will increase from VND8.8 trillion ($387.69 million) to VND13.8 trillion ($607.96 million).

    This is the largest capital increase Techcombank has made since 2008. From 2008 to 2012 its charter capital increased regularly, from VND4.7 trillion ($207.07 million) to VND8.8 trillion ($387.69 million).

    All proceeds from the share offer are expected to be invested in the VND916 billion ($40.35 million) expansion of its head office and fixed assets. It will also spend VND1.6 trillion ($70.5 million) on technology and equipment.

    The bank will also increase its capital for credit activities and investment in government bonds, to some VND2.4 trillion ($105.76 million).

    Techcombank’s pre-tax profit was VND1.3 trillion ($57.29 million) in the first quarter of this year, up 130 per cent year-on-year and representing 26.3 per cent of the 2017 plan.

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  • Fastacash to launch payments via social network in Myanmar

    Fastacash to launch payments via social network in Myanmar

    Fastacash, a global platform enabling payments across social networks, has made a strategic investment in Myanmar focused company, MyPAY.

    MyPAY, which is developing a mobile payment system, also has a strategic partnership with MySQUAR,  a social network in Myanmar with approximately 1.5 million user accounts.

    Along with the investment, fastacash will also provide the technology platform to MyPAY to enable payments through the social network. fastacash will also support MyPAY’s go-to-market activities, including market insights and global partnership management.

    Through the fastacash platform, anyone using MyPAY will be able to transfer money, and airtime to their social connections, and make payments at retail points. MyPAY is expected to leverage MySQUAR’s user base of approximately 1.5 million user accounts.

    “In MyPAY we have found a strong local partner. Together we will make social payments a reality – for the very first time – in one of the last large untapped markets. Building a presence in Myanmar is aligned with our strategy to be a global leader in social payments, given Myanmar’s prominence as a large domestic market and receive market for global remittances,” said Vince Tallent, Chairman and CEO of fastacash.

    We see tremendous opportunity for both peer-to-peer and person-to-merchant payments in Myanmar. Together with fastacash, MyPAY is going to introduce a mobile money app, compliant with Myanmar law, to make payments easier for consumers and merchants in Myanmar. With fastacash’s technology, we are able to leverage social networks such as MySQUAR. Together, we are empowering a connected market where ninety percent of people are unbanked and underserved by traditional financial institutions,” said Nicolas Nguyen, CEO of MyPAY.

    Myanmar is one of Asia’s fastest emerging economies, with its gross domestic product (GDP) rising 8.5 percent in FY2014 (IMF), and forecast to rise 7.7 percent in FY2015. McKinsey estimates the country’s economy will quadruple from US$45 billion in 2014 to US$200 billion by 2030. Economic growth in the country is expected to be tied to demographic trends and mobile and social penetration.

    The country’s young population, with 47% under the age of 24, are expected to drive the consumption of mobile and social networks.

    Myanmar’s mobile penetration is estimated to rise from 10.5% in 2014 to 57% in 2016, boosted by the entry of foreign telecom companies. Mobile is expected to present a huge opportunity for Myanmar; by 2016 nearly 15 million people will be able to access the internet, mainly via their mobile devices. As only 4.8% of citizens have a bank account, a large opportunity exists for mobile money services.

    fastacash has live services in India, Indonesia, Russia, Singapore and Vietnam. Through partnerships with banks, money transfer operators, mobile network operators and social networks, it builds social payment capabilities within their services and mobile applications. Its partners include financial institutions such as DBS Bank (Singapore), Axis Bank (India), Oxigen Wallet (India), Techcombank (Vietnam), Doku (Indonesia), MOBI.Dengi (Russia), as well as VISA Europe.

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