Vietnam banking Dealbook: ACB, MHB, MBB, STB

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A number of Vietnamese commercial banks have released their operating plans for the fiscal year of 2015; the banks expect to make some changes in both personnel and financial indicators. At the same time, the number of banks in the system might be reduced in the next couple of years, as many are looking to merge to each other to form bigger lenders. Those included Mekong Housing Bank merging with the Bank for Investment and Development of Vietnam, and Southern Bank merging with Sacombank.

Asia Commercial Bank appoints Dragon Capital CEO as a board member

 

Dominic Scriven, who is the founder and CEO of Dragon Capital, has been nominated by Asian Commercial Bank (ACB) to be its next member of the management board. The UK nationality financier used to be ACB board member during the 2008-2011 period. This time, he is appointed to replace Alain Xavier Cany, who has resigned from the same position for the 2013-2017 tenure. Scriven has also been in the boards of other listed companies such as the Ho Chi Minh City Infrastructure Investment Company and Refrigeration Electric Engineering Corp.

The Hanoi-based bank’s operation has seen improvement, as the effects of the arrest of Nguyen Duc Kien, one of ACB founding shareholders, dissipate. The bank’s profit in 2012, when Kien’s frauds were exposed, dropped significantly to VND784 billion ($36.5 million).

In the two following years, profit after tax gradually increased to reach some VND951.8 billion ($44.3 million) in 2014. Saigon Securities Inc predicts the bank’s gross profit in 2015 will jump 18 per cent to VND1.43 trillion ($66.5 million), while the bank says the use VND627.4 billion ($29.2 million) from this year’s profit to pay dividends for its shareholders.

Mekong Housing Bank confirms merger with BIDV

 

Mekong Housing Bank (MHB) has revealed that it has been working with the Bank for Investment and Development of Vietnam (BIDV) for a merger plan since the fourth quarter of last year. The detailed plan is expected to be submitted to the State Bank of Vietnam within this year.

In 2014, MHB’s gross profit stood at VND162 billion ($7.53 million), after deducting the provisions for credit risk and bad debt purchase with the Vietnam Asset Management Company (VAMC) in the year, which was VND191 billion ($8.9 million). Its bad debt ratio as of December 31 last year remained at 2.7 per cent, below the safety target of 3 per cent. The lender’s total outstanding loans by the end of last year reached VND30.6 trillion, rising 13.8 per cent year-on-year.

Meanwhile, BIDV has a much bigger size, with outstanding loans and gross profit of VND439.15 trillion ($20.4 billion) and VND6.3 trillion, respectively, last year.

Banks to increase charter capital in 2015

 

Vietnam’s Military Bank has announced a plan to issue shares to increase its charter capital from VND11.59 trillion ($539 million) to VND16 trillion ($744.2 million) in 2015. In addition, it also expects total asset will increase 8-10 per cent (currently VND200.5 trillion), credit growth will be at 13-15 per cent and profit before tax is anticipated to slightly rise to VND3.25 trillion ($151.16 million). The formerly military-run bank targets to continue to be one of Vietnam’s five largest commercial banks.

Meanwhile, another local commercial lender, Sacombank, has also planned to raise its registered capital by 9 per cent to VND13.48 trillion ($627 million). Other operating indicators in terms of total asset, fund raising and credit growth are expected to increase from 12 per cent to 15 per cent. It also aims at VND3 trillion in gross profit, up 5.2 per cent year-on-year. Besides, the bank said that the merger plan with Southern Bank has been finalised and it is waiting for approval from the authorities.

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Vietnam consolidates banks to form regional lenders