Sacombank to recoup 20 trillion VND of bad debts in 2017

Singapore group eyes State stake at Vinamilk Hai Ly By Hai Ly - The Saigon Times Daily An employee of Vinamilk checks the quality of powdered milk produced at the company’s factory in Binh Duong Province. Singapore’s leading beverages group Fraser & Neave (F&N) has expressed interest in acquiring all the State holding at Vinamilk - PHOTO: VINAMILK HCMC – Singapore’s leading beverages group Fraser & Neave (F&N) has expressed interest in acquiring all the State holding at Vietnam Dairy Products Joint Stock Co. (Vinamilk). The general director of a large investment fund whose representative is a board member of Vinamilk told the Daily that the foreign group plans to spend US$4 billion buying the State stake at the leading dairy firm in Vietnam. State Capital Investment Corporation (SCIC) represents the State as a stake holder at the nation’s leading dairy firm. Earlier, the Government allowed SCIC to sell its 45.1% stake at Vinamilk in Document 1787/TTg-DMDN on a restructuring plan of the corporation. Under the document signed by Deputy Prime Minister Vu Van Ninh, SCIC can divest State holdings at Vinamilk and other nine enterprises on a date of its choosing and submit a related report to the Prime Minister for approval. F&N via its affiliate F&N Dairy Investment currently holds an 11% stake at Vinamilk. A source of the Ministry of Finance said the ministry has urged SCIC to draw up the divestment plan. The stakes will be offered for sale to all investors through public auctions on…... [read more]

The approval was given after the bank’s board of directors consulted its shareholders on the issue at its annual shareholders’ meeting in Hanoi. After the merger, the new financial institution will continue to be named VietinBank, becoming the largest and 2nd largest bank by registered capital and assets in Vietnam with VND40 trillion (US$1.85 billion) and VND686.9 trillion (US$31.6 billion), respectively. VietinBank shareholders also agreed on the swap ratio of 1:0.9, or one PG Bank share will be exchanged for 0.9 Vietinbank share, at the meeting, and the Hanoi-based bank will issue more shares for conversion with PG Bank shares. Talking to Tuoi Tre (Youth) newspaper, Bui Ngoc Bao, PG Bank chairman, said that the bank's shareholders unanimously approved the merger with VietinBank at their separate meeting on April 14. It is expected that the SBV will approve the merger between the two banks in June this year, Bao added. The merger with PG Bank, of which about 40% stakes owned by national oil trading conglomerate Petrolimex, was one of the most important content for which VietinBank leaders sought the approval from their shareholders at the meeting. The VietinBank leaders said that after the merger, long-term strategic cooperation between the new bank and large corporations in the energy sector will be boosted significantly in addition to an expansion of capital, networks, and customer base. This is the basis for the bank to increase the size of credit and deposit balances, said the bank’s leaders. At a VietinBank conference in late…... [read more]

The two fisheries surveillance ships, designed by Dutch Group Damen, are equipped with advanced technology, weighing 500 tons each and capable of maximum speeds of up to 21 nautical miles per hour. In normal conditions, the ships have a range of about 5,000 nautical miles for constant operations. Ship KN-2011 No 01 and another one KN-2001 No2 will be handed over by late June and mid-July, respectively. PM Dung praised staff, engineers and workers of one- member limited liability Ha Long Shipbuilding Company for their efforts in overcoming difficulties to accelerate the completion of the projects, thus meeting the Navy Commander’s requirements for enforcing maritime law enforcement duties and protecting the country’s sea and island sovereignty. Dung highlighted the need to focus on improving the quality of ships to ensure high technical standards and safety for maritime law enforcement forces. The Government leader stated that Party and State resolution on Vietnam’s maritime strategy requires steady development of the shipbuilding industry, so as to meet the current requirements. The shipbuilding industry has made great strides in building high-quality ships, including military ships, he added “To continue developing the shipbuilding industry to meet transport needs and reinforce security and defence, the Shipbuilding Industry Corporation should continue with its restructuring scheme and devise a proper production plan to speed up new projects, helping to generate jobs for thousands of workers.” he concluded.... [read more]

Banks Still Need Drastic Restructuring After 5 years of restructuring weak banks to early 2017, the State Bank of Vietnam (SBV) continued to spot out fragile lenders and openly assessed cross-ownership issues to introduce effective settlement measures. This showed that the process of the banking system restructuring still has very hard work ahead. Restructuring - Five years and more SBV Deputy Chief Inspector Nguyen Van Hung said that the central bank continued to handle major system issues in 2016, including credit institution model, bank risk management capacity, bad debt and cross-ownership. Frail credit institutions were scaled down and merged with healthy ones in a willing spirit. State-owned commercial banks were lifted to a new level. Weak lenders were drastically restructured and settled after their problems were defined. All fragile credit institutions were identified, including three banks purchased by the SBV for zero Vietnamese dong and two other weak joint stock commercial banks. They will be focused for settlement in 2017.According to the restructuring progress of these five weak banks, the central bank reported the cases to the Government and the Politburo gave detailed conclusions to them. The SBV has integrated directive opinions to report them to the Government for guidance before getting started. In 2017, it will drastically carry out restructuring tasks and gradually tackle existing matters. With respect to ownership and risk management, the SBV defined these as key matters and will introduce measures for gradual settlement in order to terminate bank cross-ownership by 2020. To accelerate the restructuring…... [read more]

Ministry scraps conditions on rice export Minister of Industry and Trade Tran Tuan Anh on January 4 issued a decision revoking Decision 6139/QD-BCT on a master plan for rice exporters which has made life difficult for domestic enterprises. The decision sets out criteria and conditions to become a rice exporter, including requirements for warehousing and milling facilities, and the applicant's rice export performance in the preceding year. The abolition of the rule will partly remove difficulties for enterprises, boosting rice exports at a time of rising rice export woes and fiercer competition. In Official Letter 8768/BCT-XNK, the ministry proposed the Government consider cancelling the plan last September, on the basis of the review of its implementation in the past time. Vietnam's rice sector has secured sustainable growth since the late 1980s. The steady increase has helped the country not only ensure food security, but also become one of the three largest rice exporters in the world. However, incomes of farmers have yet to rise correspondingly. Thailand, India, Pakistan and Vietnam are major rice exporting countries, accounting for 71.8% of global rice exports, while China, Nigeria, Iran and Indonesia are main rice importers. Each rice exporting nation often has its own key export markets and competes in other markets. However, by focusing too much on output expansion, the sector has compromised on rice quality, which has in turn affected prices. Falling rice prices have hurt many stakeholders, especially farmers. Vietnam did not fully achieve its targets for rice exports last year,…... [read more]

The suggestion was made by Politburo member and head of the Party Central Committee's Economic Commission Nguyen Van Binh at a meeting held by the Party Committee of the Centrally run Business Bloc in Hanoi on January 9, reviewing the bloc’s operation in 2016 and launching tasks for 2017. Speaking at the event, Politburo member Binh praised contributions by the bloc’s Party Committee in directing political work by corporations, banks and enterprises under the bloc. Though budget revenues by the bloc in 2016 were lower than in 2015 due to the impact of lower oil prices, better performance by enterprises under the bloc was a highlight, especially service units such as VNPT, Vietcombank and Vietnam Airlines. Total revenue is estimated at more than VND1.4 quadrillion (US$61.6 billion), accounting for 92.77% of 2015 figure, while contributing VND195 trillion to the State budget, equalling to 86.99% of that in 2015. Business restructuring was drastically focused over the last year, creating an important step forward on equitisation and the divesting of non-core and improving business performance under the approved restructuring scheme. Thanks to such efforts, only two out of all 33 businesses in the bloc recorded losses. They seriously fulfilled their obligations to the State and made an important contribution to national budget revenues, while taking a lead in the implementation of social welfare activities. Statistics at the event show that the bloc’s total revenue in 2016 was estimated at over VND1.4 quadrillion. (Credit: In addition to these achievements, Politburo member Binh…... [read more]

Highway Construction: Capital Concerns According to the master plan for the Vietnam transportation system to 2020 developed by the Ministry of Transport, the total investment value for ground transport infrastructure to 2020 was estimated at VND1,000 trillion (US$60 billion). This is not a small figure in the context of State budget shortage in the midst of investment-prioritised investment fields. Nearly 6,400 km of highways Vietnam will need about VND66 trillion for transport infrastructure investment a year, including VND22 trillion for highways. Speaking of solutions to the capital issue, Mr Mai Anh Tuan, Deputy Director of the Directorate for Roads of Vietnam, said that the Ministry of Transport will ask the Government to recommend the establishment of a traffic maintenance and management fund and mobilise various sources of investment capital for traffic construction such as State budget, development credit funds, the business sector and government bonds. Currently, the Government is applying many priority policies for road infrastructure investment, particularly for expressways. According to statistics from the Ministry of Transport, Vietnam now has 256,000 km of roads, including over 200,000 km of urban roads. Road density is 0.78km per square kilometre by area and 3.09 km per 1,000 residents by population. According to experts, Vietnam’s traffic density is now not low relative to other countries in the region. The quality of the road system has also been significantly improved over the years. Particularly, in national highways and provincial roads, its road density is still low in comparison with the region. For the…... [read more]

Central bank to take over one more lender Thao Nguyen HCMC – The State Bank of Vietnam (SBV) plans to acquire one more ailing bank at zero dong as part of the banking restructuring scheme this year, a leader of the central bank told the Daily on January 5. The SBV will only acquire the bank if it fails to find strategic investors. The lender, whose name is not yet disclosed, has reported negative equity and been under special control while law enforcement officers have taken legal action against its former leaders. The acquisition of 100% shares of loss-making banks at zero dong each aims to avoid causing negative impact on the banking system. The move would be made if their existing shareholders fail to inject additional capital and if banks cannot find new investors. No organizations have offered to buy shares of the troubled bank, prompting the central bank to mull the acquisition. The agency is considering a suitable acquisition scheme to secure its normal operations, the official said. In 2015, the central bank took over Construction Bank, Ocean Bank and GPBank at zero dong. The three lenders had negative equity and huge bad debts while some of their leaders were arrested. According to the SBV leader, the lenders have made positive changes in recent times. Their liquidity has improved and they have not made bad impact on the banking system any more. However, it takes a long time for the banks to get back to the good old…... [read more]

Protectionism seen hindering farm produce exports Thuy Dung HANOI – Protectionism is seen becoming one of the main challenges for Vietnam’s farm produce exporters in 2017, especially after Donald Trump was elected president of the United States and the UK voted to leave the European Union last year. There have been significant changes in global trade. Notably, protectionism has come back in many countries, especially for agricultural products, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said at a press conference in Hanoi on January 5. As more than half of Vietnam’s farm produce output is exported, the rise of protectionism would affect the nation’s export revenue and agricultural development this year, he said. In addition, other countries have strongly invested in agriculture to improve food security and raise the competiveness of their farm produce. China has decided to pour US$450 billion into agricultural restructuring, Thailand has set aside US$1.5 billion for rice farming to cope with market challenges, and Myanmar is moving on with an agricultural restructuring scheme. Meanwhile, last year was tough for the local farming sector as natural disasters hit many parts of the country, causing total damage of VND39 trillion, or three times higher than the five-year average. The Formosa-caused coastal pollution in four central provinces also left heavy consequences, dragging down agricultural growth in the first six months by 0.18%. However, the sector then recovered with gross domestic product (GDP) advancing 1.36% at the end of 2016. Its export value hit a record high…... [read more]

SBV picks new chairman for VAMC The Saigon Times Daily HANOI – The State Bank of Vietnam (SBV) on January 3 announced a decision appointing Nguyen Tien Dong, head of the SBV’s Credit Department, as chairman of Vietnam Asset Management Company (VAMC), with effect from January 1. According to Decision 2539/QD-NHNN dated December 30, 2016, Dong will take the helm of VAMC in the 2017-2021 tenure, replacing Nguyen Quoc Hung. The SBV on January 3 also held a ceremony to hand over Decision 2538/QD-NHNN signed on December 30, 2016 to Hung, assigning him to replace Dong at the Credit Department in the same tenure. Local media cited SBV deputy governor Nguyen Kim Anh as saying at the ceremony that VAMC must draw up a financial plan for 2017 in line with the prevailing regulations and implement it immediately. He noted VAMC’s plan in 2017 and the following years should be in sync with the Banking Supervision and Inspection Agency’s tasks and the restructuring scheme for the banking system in 2016-2020. VAMC is tasked with reviewing and classifying debts that were acquired via the issuance of special bonds to adopt appropriate measures to tackle bad debts efficiently. The enterprise should assign its departments to sell bad debts and mortgaged assets and cooperate with credit institutions to collect and restructure debts. Speaking to the Daily recently, Hung said the company had purchased VND22.92 trillion of bad debts from 18 credit institutions by end-December last year. Since it came into operation, the company…... [read more]

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