"Sacombank is not a weak bank, we are still in the top 5" - Mr. Kieu Huu Dung confirmed04/01/2017
In the morning of 4th January 2017, at the State Bank of Vietnam’s press conference on summarizing banking activities in 2016 and implementing action plan for 2017, Deputy Chief Inspector Nguyen Van Hung said that the SBV has identified all weak credit institutions. So far, the liquidity issue has been improved and did not cause any disruption. It would be addressed more strictly in the next time. And he added, in 2017, the SBV also focuses on tackle three 0-buck Banks (Ocean Bank, GPBank and VNCB – by reporter) as well as DongABank and Sacombank.
DongABank has been happened to be in the special control in August 2015. But so far, with the support of the SBV, the situation has been improved significantly. In December, after the arrestment of DongABank’s former leaders, the Bank’s situation was not only unaffected but also become better.
For Sacombank, in 2015, Mr. Tram Be, was the standing Deputy Chairman of Sacombank, has authorized to the SBV to indefinitely irrevocable his entire stake in Sacombank, Southern Bank and and the post-merger Bank. Since then, together with merging Southern Bank process, Sacombank has been restructuring.
After surprisingly announcement about handling Sacombank problems mentioned by SBV representatives this morning, we have contacted Mr. Kieu Huu Dung, Chairman of Sacombank for more details.
Mr. Dung said, regarding the SBV mentions on the 5 banks means banks in 0-buck group, DongABank and Sacombank after the M&A. For each group, the authorities would have different solutions.
Reporter: Sir, regarding the comment of SBV about Sacombank as a case need-to-be-solved, what does it really mean?
Mr Kieu Huu Dung: I assert that Sacombank is not a weak bank, we are currently still maintaining in Top 5 largest banks in Vietnam and being a lead among commercial joint-stock banks.
Because of the well-performing and sustainable inner force, Sacombank was encouraged and supported by the SBV to implement the Government 254 scheme which accepting to merge Southern Commercial Join Stock Bank in to Sacombank.
Regarding the comment of SBV on the necessary of thoroughly tackle existing issues means that the SBV will work together with Sacombank to handle nonperforming assets, bad assets from Southern Bank after the merger. This process requires clear strategy, accounting method, debt, debt settlement ...
But we can not deny that since the merger with Southern Bank, Sacombank situation is going downward remarkably, as shown by such lower profit than the previous years. Could you share more about the current circumstance of the Bank?
Sacombank has been performing well from the pre-merger period till now. It does not mean that the pre-merger performance was well and the post-merger is going worse. Even after the merger, the overall operation of Sacombank does not show any disorder or disturbance, business results are still growing steadily.
If counted for Sacombank only, this year we made a profit before tax of about 4,000 billion VND, is much higher than that number in the previous year which is just amost 3,000 billion VND. However, after including Southern Bank’s business result, we have to increase risk provision to address the backlog issues which affects to the post-merger bank’s profit.
Currently, the Sacombank restructuring scheme after merger which including plans for dealing with backlog issues from Southern Bank is being submitted to the SBV. We will immediately start implementing restructuring plan once receiving approval from the SBV in 2017.
By 31.12.2016, the total assets of Sacombank is over 330 trillion VND, increased by 13.6% compared to 2015, equity also reached more than 22 trillion, and continues to be in Top 5 largest bank in Vietnam in terms of scale.
Our total mobilized capital is almost 300 trillion VND, of which the amount raised from the market 1 is 290 trillion VND, up by 11.6% from the early year despite of the increasing of market competitiveness. This is the foundation for Sacombank to continue to promote credit growth. Total credit reached more than 232 trillion VND, up by 18.6%, in which customer loans reached more than 193 trillion VND, increase by 7%.
It seems that you are very confident about the Bank situation, aren’t you?
Sacombank itself has historical tradition of 25 years, we have served millions of customers, and have become a leading bank in the banking system. Our management team and staff are very dedicated to build a strong bank.
As for the implementation of the merger strategy, the shareholders themselves and our staff had obviously acknowledge that there will exist certain difficulties but we have to join hands together with the support from the SBV to handle problems of Southern Bank. Based on these reasons, we are very confident with our development journey.
I would also reveal that there is foreign investor willing to invest $1 billion in Sacombank and one other domestic investors willing to buy 20% of the bank's capital with a rate of 1.5 (equivalent to VND15,000/share - reporter) - as twice as the current stock market price of the STB.
This is to show that we are not only confident about the Bank but the local and foreign investors also have high assessments for us.
So may the Bank need any support from the SBV, Sir?
SBV is actively leading Sacombank’s restructuring scheme. We highly expect more and more support from the SBV in the next period of post-merger restructuring time.
Thank you for your sharing!