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Tag: Vietcombank

  • Dollar plunges at banks

    Dollar plunges at banks

    The U.S. dollar plunges at commercial banks Wednesday morning, with Vietinbank selling it at VND24,785, down 0.26% from Tuesday.

    It dropped 0.20% to VND24,800 at Vietcombank, and 0.28% to VND24,770 at Eximbank.

    The State Bank of Vietnam set the reference rate 0.01% lower at VND23,665.

    The greenback is sold at VND24,960 on the black market, down 0.24%.

    The Dollar Index, which measures the greenback’s strength against major currencies, hovers around 106, down from a 20-year high of 114.78 on September 28 on expectations that its rally may have been overstretched and as the Fed looks to slow its pace of rate increases.

    Rising inflation and geopolitical tension have pushed the dollar up 8% over the dong by over 8% since the beginning of this year.

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  • Dollar drops against dong

    Dollar drops against dong

    TPBank let the dollar slide 0.004% to VND24,854. Techcombank sold it at VND24,852, down 0.004%.

    The State Bank of Vietnam set its exchange rate at VND23,671, also down 0.004%.

    The dollar was sold VND24,940 at unofficial exchange points, down 0.4% from Wednesday.

    The U.S. dollar was broadly weaker on Thursday as investors, encouraged by the prospect of a slower pace of interest rate hikes from the Federal Reserve, placed bets on riskier assets.

    The dollar index, which measures the greenback against six major peers, was down 0.066% at 105.830, after sliding 1% overnight.

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  • Dollar rises to all-time high against Vietnamese dong

    Dollar rises to all-time high against Vietnamese dong

    The U.S. dollar continued to strengthen and reached its historic high against Vietnamese currency Saturday.

    The State Bank of Vietnam (SBV) on Saturday morning set the reference rate for the Vietnamese dong at VND23,283, the same as Friday and VND50 higher than early this week.

    At commercial banks, the Vietnamese dong is at its lowest in history.

    Vietcombank, the country’s largest lender, has sold the U.S. dollar for VND23,795, up more than 3.8 percent from the beginning of this year.

    Top private player Techcombank’s rates were VND23,810, Eximbank’s were VND23,790, and Sacombank VND23,967.

    The SBV allows the Vietnamese dong to trade within a band of 3% on either side of the reference rate, which is based on eight currencies and set daily.

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  • Vietnam urges banks to merge, become more competitive

    Vietnam urges banks to merge, become more competitive

    The Vietnamese government is urging banks to merge and increase their scale toward becoming more competitive. It wants to make Vietnam an ASEAN leader in the banking sector.

    The government wants banks to have a capital adequacy ratio of at least 10-11 percent by 2023, and 11-12 percent by 2025, according to a recent plan to restructure credit organizations and handle bad debts during the 2021-2025 period.

    The capital adequacy ratio is a measure of how much capital a bank has available to handle a certain amount of loss before facing the risks of becoming insolvent.

    The government has said it wants Vietnam’s banking sector to become a top four leader in the ASEAN bloc. It has asked banks to make plans to increase their charter capital and improve their management.

    Big banks should have a minimum charter capital of VND15 trillion by 2025, and small and medium banks, VND5 trillion, it said.

    The government also wants banks to have a bad debt ratio of under 3 percent by 2025.

    Vietnam has 31 domestic commercial banks, with the biggest in terms of charter capital being state-owned lenders BIDV, Vietinbank and Vietcombank, according to the State Bank of Vietnam.

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  • Vietcombank Remittance Company bags two int’l awards

    Vietcombank Remittance Company bags two int’l awards

    Vietcombank Remittance Company was awarded the “Excellence Money Transfer Company” and “Best Home Payment Service Provider” titles by U.K.-based Global Banking and Finance Review magazine.

    Global Brands Magazine (GBM) is a prestigious U.K. online publication and forum for top brands of the global business community. The winners are selected based on commitments and efforts in the pursuit of outstanding values including: innovation, quality, increasing brand awareness, technology application, risk management, customer service, that promote the dynamic business environment of the remittance industry in Vietnam.

    To meet the above criteria, Vietcombank Remittance Company (VCBR) has remarkably improved its operational procedures, diversified its products, and enhanced its customer experience.

    Dao Minh Tuan, deputy CEO of Vietcombank, chairman of the VCBR Board of Directors, said the two awards obtained from GBM magazine are a significant affirmation and recognition of VCBR’s efforts and achievements in providing the best market service.

    “To record such great achievements, thanks to the steadfast effort of the entire VCBR team, in providing the best service experience, building solid trust with customers and partners. However, VCBR will encourage further innovation in its business operation to work toward the goal of becoming the number one remittance company in Vietnam,” he added.

    VCBR was established in 2017 with the task of facilitating remittances from abroad to Vietnam, supporting the ecosystem of Vietcombank’s products and services.

    Vietcombank has set its vision and strategic objectives toward 2025: Maintaining its position as the No. 1 retail bank in Vietnam and becoming one of the 100 largest banks in Asia; one of the 300 largest banking and financial groups in the world and finally one of the 1,000 largest listed companies in the world.

    The Covid-19 pandemic has had a dire impact on the global economy in the last two years. A huge number of companies have been forced into bankruptcy, and the unemployment rate has reached a record. The pandemic also had a serious impact on money transfer and remittance activities.

    In Vietnam, remittance companies constantly had to narrow the scope and scale of their operations. Under the circumstances, VCBR has proactively adapted to the chaos along with encouraging innovation, ensuring safe business performance, profitability and high efficiency.

    According to Nguyen Hoang Minh, Deputy Director of State Bank of Vietnam Ho Chi Minh Branch, the flow of remittance to Ho Chi Minh city By the end of November is about $6.2 billion, which has already surpassed the volume of 2020 at $6.1 billion. VCBR has achieved striking growth in terms of volumes with a forecast of an over 60 percent increase compared to 2020, ranking among the top 2 remittance companies in Vietnam.

  • Vietcombank gets new chairman

    Vietcombank gets new chairman

    Vietnam’s biggest state-owned lender, Vietcombank, has named Pham Quang Dung as its new chairman until 2023.

    Dung, 48, has been its CEO and a member of the board since 2014.

    Nguyen Thanh Tung, deputy director, temporarily takes over as CEO until a new person is appointed.

    Dung has 27 years’ experience in the financial and banking industry.

    He joined Vietcombank in 1994, and has served in various positions including deputy director of a financial division in Hong Kong and deputy director of the bank.

    The previous chairman of the bank, Nghiem Xuan Thanh, was appointed the Secretary of the Party Committee of Hau Giang Province in early July.

    Vietcombank is 74.8 percent owned by the government, 15 percent by Japan’s Mizuho Corporate Bank and the rest by other shareholders.

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  • 16 banks to lower loan interests amid Covid-19

    16 banks to lower loan interests amid Covid-19

    Sixteen commercial banks have agreed to reduce interests on existing loans of Covid-hit businesses from now until the end of the year.

    The banks include Vietcombank, Vietinbank, BIDV, Agribank, Techcombank, MB, VPBank, TPBank and Sacombank.

    Lowering interests is difficult, but this is the time when banks need to share the burden with businesses, said Nguyen Quoc Hung, general secretary of Vietnam Banks Association, at a meeting Monday.

    Agribank is committed to lowering its interests by one percentage point on average, while MB will do so for at least one percentage point.

    Sacombank will seek shareholder permission as lowering the interest by one percentage point is equivalent to 40 percent of its profit target for the year. Some other banks will do the same.

    But not all businesses will be eligible for the reduction. Bank leaders said they would focus on companies truly hurt by the pandemic

    “Real estate companies with large profits, export firms or individuals borrowing money to buy cars should not be eligible for the reduction,” said Deputy Director of Techcombank Pham Quang Thang.

    He added companies that are essential to the economy with a large workforce should be eligible.

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  • Vietcombank H1 profit surges 35 pct

    Vietcombank H1 profit surges 35 pct

    State-owned lender Vietcombank reported a VND14.8 trillion (nearly $643.5 million) profit in the first half of the year, up more than 35 percent year-on-year.

    A senior Vietcombank official who did not want to be named said Monday that the rise in profit can be attributed to a 60 percent year-on-year increase in non-interest income, mainly from services.

    In the first half of the year, the bank made bancassurance revenues of some VND500 billion.

    In its first-half review meeting held late last week, Vietcombank said that as of late June, its outstanding loans rose over 9.8 percent against late 2020 to VND920 trillion.

    The credit growth of more than 9.8 percent approaches the ceiling rate of 10.5 percent set by the State Bank of Vietnam for the whole year, so Vietcombank has proposed that the central bank increases it to 14 percent.

    Its bad debt ratio increased from 0.6 percent early this year to 0.91 percent by the end of the second quarter, due to the Covid-19 outbreak.

    The Vietcombank official said profit growth in 2021 is projected to be lower than the first half surge as credit growth has approached the ceiling rate, and the bank plans to continue to lower lending interest rates in the second half. Its bad debts are likely to increase further because of the pandemic.

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  • Banking sector eyes growth potential

    Banking sector eyes growth potential

    Vietnam Report JSC recently announced the nation’s Top 10 prestigious and effective public companies for 2021 with six banks including Vietcombank, ACB, VPBank, VIB, MBBank and Techcombank.

    Over the past two years, these banks have been recognized by economists and investors for their financial strength and communication capacities, their growth potential, level of sustainable development, quality of corporate governance and the positions in the industries.

    By the end of June 10, the banking industry accounted for 34 percent of HCMC Stock Exchange market capitalization with stock prices growing 18 percent in one month, 40 percent in three months, and 77 percent in six months, respectively.

    According to analysts, the above-mentioned banks have helped the banking industry affirm its position as one of the major pillars of Vietnam’s economy as the sector has contributed to regulating financial supply and demand for businesses and individuals, especially in the context of the economy being challenged by the Covid-19 pandemic.

    A JP Morgan report showed Vietnamese banks offer the best combination of growth and return on equity (ROE) in ASEAN at 18 percent, double that of other countries in the bloc.

    According to analysts, there are three growth drivers for the strong growth of the banking industry in the medium and long-term including the strength of the local economy, self-improvement and digital transformation.

    According to the World Bank, though Vietnam has been affected by the Covid-19 pandemic, the local economy still boasts many positive achievements, demonstrating its sustainable internal strength.

    Meanwhile, Vietnam is among the few economies predicted to grow positively in the coming years with major drivers being domestic production, along with consumption and exports. The banking industry, with its role as a financial support for the whole economy, is also forecast to continue growing in resonance with the national economy.

    At the same time, Vietnam’s population is expected to reach 120 million by 2050, an increase of over 20 percent compared to the present, with the middle-class proportion to double from 13 percent to 26 percent by 2026. That will open up golden opportunities for banks especially those that have considered retail business a core area.

    Currently, Vietnam International Bank (VIB), Asia Commercial Bank (ACB), Saigon Thoung Tin Commercial Joint Stock Bank (STB), Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and Military Commercial Joint Stock Bank (MBBank) are recognized as five leading private banks with top retail loans.

    Notably, VIB and MBBank rank top with a compound growth rate of 49 percent and 31 percent respectively over the past five years. VIB is also considered the leading retail bank as its outstanding retail balance accounts for over 86 percent of the total outstanding balance, of which over 95 percent of retail loans have collateral.

    The banking industry has been experiencing positive changes in recent years. The dynamic business model, effective application of digital transformation and significant improvement in internal strength have brought impressive business results.

    In addition, the State Bank of Vietnam has accelerated the application of international risk management standards. That has contributed to improving the transparency of information, enhancing the prestige of local banks to domestic and international investors.

    The below table, sourced from audited financial reports of relevant banks from 2016 – 2020, mentions key financial indicators that clearly show the top six banks obviously stand out from median industry performance.

    Banks % ROE % ROA % CIR % NPL & VAMC % CAR CAGR Profit before tax 2016-2020 (%)
    VIB 29.6 2.2 40 1.7 10.1 70
    ACB 24.3 1.9 42 0.6 11.1 55
    VPB 21.9 2.6 29 3.4 11.7 27
    VCB 21.1 1.4 33 0.6 9.6 28
    MBB 19.1 1.9 39 1.1 10.4 31
    TCB
    18.4
    		3.1 32 0.5 16.1 41
    Industry median 18.8 1.6 39 1 10.8 39

    Quickly embracing digital transformation

    The banking sector’s strong growth in recent years is also attributable to the endless efforts of local banks in quickly embracing digital transformation. The banks that have actively participated in digital transformation will meet the increasing needs of customers while launching new products and services to both better serve their clients and increase business efficiency.

    Among them are VIB, MBBank and Techcombank, which have launched digital product packages like digital accounts, bank cards and completely free digital banking services to better facilitate customers.

    Amid the Covid-19 pandemic, digital solutions offered by these banks have assisted customers to make transactions and conduct basic banking services online instead of visiting branches or transaction offices.

    Analysts said banks that have a clear digitalization strategy will soon boost their market share and quickly lead the sector in terms of growth rate and quality of services. This has happened in markets like the U.S., Australia and Singapore.

    They added with the three above-mentioned growth drivers, sustainable development with many distinctive imprints of the six banks in the Top 10 is expected to be a bright spot for the banking industry and the Vietnamese economy in future.

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  • Vietcombank, Vinhomes tickers drive VN-Index up

    Vietcombank, Vinhomes tickers drive VN-Index up

    Vietnam’s benchmark VN-Index rose 0.61 percent to 1,268.28 points Tuesday, a new peak, led by Vietcombank and Vinhomes tickers.

    The index was on an upward trend throughout the day, hitting the 1,286 mark in the early afternoon before falling to the 1,260 range. It closed with a near 8-point gain.

    Trading value on the Ho Chi Minh Stock Exchange (HoSE), on which the index is based, rose 17 percent to VND23.1 trillion ($1 billion), the highest of the past five sessions. The bourse saw 187 tickers gain and 227 lose.

    VCB of state-owned lender Vietcombank contributed most to the gain of VN-Index this session with 4.5 points.

    It rose 4.6 percent to a three-month high. The ticker has gained 6.8 percent in the last two sessions.

    VHM of real estate giant Vinhomes contributed 3.6 points to VN-Index’s rise. It closed with a 3.9 percent gain, hitting a new historic peak.

    VNM of dairy giant Vinamilk pushed the index up by 1.8 points. It rose 3.3 percent, with 6.99 million shares being traded, the highest since November 2017.

    PDR of Phat Dat Real Estate Development rose 4.6 percent to a new all-time peak. This is its third session in the green.

    MWG of electronics retail chain Mobile World also hit a new peak with a 3.7 percent gain.

    On the losing side, TCH of real estate company Hoang Huy Investment Financial Services plunged 2.6 percent. It has lost 14 percent in the past 11 days.

    Foreign investors were net sellers for the fifth session in a row to the tune of VND553 billion, down 25 percent, with strongest pressure on VHM, VNM and CTG of state-owned lender VietinBank.

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  • Vietnamese banks continue to ascend global brand rankings

    Vietnamese banks continue to ascend global brand rankings

    Nine Vietnamese lenders, five of them state-owned, have risen up the list of the world’s 500 most valuable banking brands.

    State-owned Agribank, one of the ‘Big 4’ state-owned lenders, jumped 17 places to 173th in the annual ranking put out by U.K. consultancy Brand Finance.

    Fellow state-owned lenders Vietcombank and VietinBank rose 27 and 61 spots to 180th and 216th.

    BIDV was at 246th and MB at 374th, up 30 and 12 spots.

    Of the private lenders, VP Bank rose 37 places to 243rd and the country’s private player, Techcombank, jumped 57 spots to 270th.

    Sacombank and ACB rose 30 and 23 places to 392nd and 397th.

    The report said VietinBank was one of 10 fastest-growing banks globally last year.

    “Vietnam’s banking sector has seen the greatest year-on-year brand value growth of any nation in the rankings with 23 percent,” the consultancy said.

    “Vietnam’s ability to effectively control and constrain Covid-19 has allowed it to buck the sector-wide trend of declining brand value.

    “Internal reforms have strengthened accountability in the Vietnamese financial sector, which has had the knock-on effect of boosting not just revenues, but brand reputation and trust.”

    Vietnam’s banking sector has recorded cumulative brand value growth of 753 percent in the last five years, the second-highest rate in the rankings.

    “Since the Vietnamese government introduced its strategy to boost accountability and the strength of the banking sector, including more stringent capital requirements and greater transparency, customer perception has improved,” Brand Finance said.

    China’s ICBC was the world’s top bank brand.

    Chinese banks maintained their dominance in the rankings, accounting for 33 percent of total brand value and seven of the 10 top climbers.

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  • VPBank profits jump 26 pct

    VPBank profits jump 26 pct

    Lender VPBank reported a 26 percent jump in pre-tax profit last year to VND13 trillion ($564.24 million).

    The second and fourth quarters saw its highest ever quarterly profits of VND3.67 trillion and VND3.62 trillion.

    The lender’s profits exceeded those of state giant BIDV and private lender VIB.

    Its income was up 7.3 percent to VND39 trillion, with interest income accounting for nearly 83 percent.

    Services and securities trading were profitable, but foreign exchange trading caused a loss.

    Credit growth was 13.1 percent, and non-performing loans accounted for 2.9 percent.

    In 2019, VPBank had reported the sixth-largest pre-tax profit behind Vietcombank, Techcombank, Agribank, VietinBank, and BIDV.

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  • Vietcombank targets 12 procent profit growth

    Vietcombank targets 12 procent profit growth

    State-owned lender Vietcombank has announced credit growth and pre-tax profit targets of 12 percent and VND25.2 trillion ($1.09 billion) for 2021.

    The 12 percent credit growth target matches the target set for the banking industry as a whole, the lender said.

    In 2020 Vietcombank’s profit was VND23 trillion, the same as the previous year. It also targets keeping non-performing loans at under 1 percent and achieving a net profit margin of 3.1 percent.

    Last year, non-interest income accounted for 50 percent of total income, up 10.7 percentage points from 2019. Income from treasury operations and investment accounted for 21 percent.

    In April 2020, Vietcombank became an exclusive bancassurance partner of FWD, the insurance arm of Hong Kong billionaire Richard Li’s investment firm Pacific Century.

    Its income from bancassurance was VND1.87 trillion, or 18 percent of non-interest income.

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  • The great banking profit paradox of Covid-hit 2020

    The great banking profit paradox of Covid-hit 2020

    Banks made huge profits in 2020 although the economy grew at the slowest rate this decade and 70 percent more companies shut down than in 2019.

    VietinBank, Vietnam’s third largest lender by assets, reported a 40 percent increase in profit. Vietcombank reported profits of around $1 billion, the same as the previous year. Tien Phong Commercial (TPBank) and Vietnam Maritime Commercial Joint Stock Bank saw their profits increase by 11 percent and a scarcely believable 90 percent.

    State-owned VietinBank attributed the jump in profits to a surge in non-interest income and reduction in operation costs.

    Vietcombank said it owed its profits to bancassurance. In the first nine months, profits had been down 17 percent, but they recovered rapidly in the last three months, increasing by 30 percent, to claw back to the previous year’s levels.

    VPBank and Techcombank were two of the most profitable lenders. They have yet to announce full-year figures, but in the first nine months their profits rose by 30 percent and 20 percent, respectively.

    VPBank managed to cut costs while its income remained steady, while Techcombank saw interest income increase by 28 percent and non-interest income by 65 percent.

    They benefited from a particular segment auto loans. The 50 percent cut in car registration fees in the second half of the year sparked a rush to borrow to buy vehicles. VIB’s interest income in the third quarter was up 38 percent, and the fourth quarter saw probably more of the same. Income for the first nine months rose by 30 percent. TPBank’s interest income too rose by almost 30 percent.

    “Banks’ results are not as we expected,” SSI Securities researchers said in a note. They had forecast in April that banks’ profits would fall by 11 percent in 2020, but in the first nine months, they rose by 11 percent.

    They said the rising profits were due to a surge in non-interest income and improvement in net interest margin (NIM).

    For the banks SSI researched, non-interest income was up by 15 percent in the first half and almost 60 percent in the third quarter, with private joint stock banks providing a major boost.

    “Payment services, trade finance, bancassurance, and remittances revived in the third quarter after social distancing in April and May suppressed demand,” SSI said.

    The second quarter saw NIM plunge due to interest rate cuts and loan restructuring, but it recovered in the third quarter, in fact, reaching a three-year peak as deposit interest rates fell sharply and lending interest rates gradually rose back up.

    The third quarter saw a 9 percent rise in interest income and 31 percent increase in non-interest income.

    It is estimated that for the full year banks’ net profits would rise by 10.2 percent, while that of non-financial companies would fall by over 21 percent, financial data company Fiingroup said.

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  • Big state banks gradually lose credit market share

    Big state banks gradually lose credit market share

    The credit market share of Vietnam’s three largest banks has fallen by 2.7 percentage points in the last two years due to liquidity constraints.

    The three, all state-owned and listed and the country’s largest by assets, Vietcombank, Vietinbank and BIDV, account for 34 percent of all loans outstanding, securities company VDSC said in a note last week.

    But this represents a 2.74-percentage-point fall even as the four largest non-state banks, Techcombank, VPBank, Military Bank (32.42 percent state-owned), and ACB, increased their share of loans outstanding by 1.6 percentage points.

    During the two years ending in the third quarter of 2020, VietinBank’s share fell by 1.96 percentage points, BIDV’s by 0.7 percent and VCB’s by less than 0.1 percent.

    The big fall in VietinBank’s market share is because it has been strapped for cash. There have been no major infusions of capital in the past few years, return on equity has been low, bonuses and employee welfare funds cause a big drain on resources, and the government appropriates much of its earnings.

    This situation has been exacerbated by Basel II standards, which prescribe a capital adequacy ratio (CAR) of 8 percent of risk-weighted assets for all financial institutions. Thus, to lend more, banks have to increase their charter capital.

    Though the Government has agreed to reduce its ownership in state-owned banks from 65 percent to 51 percent by 2025, it has yet to be implemented.

    But the government issued a decree in October allowing state-owned banks to pay dividends in stocks to increase their capital, helping them improve their growth prospects in the medium and long terms.

    According to the State Bank of Vietnam, banks’ total outstanding loans were worth VND8.69 quadrillion ($376.87 billion) at the end of the third quarter.

    Credit growth is expected to be 11 percent in 2020, down from 13.5 percent in the previous year.

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