In the report to the National Assembly and State Audit, the Vietnam Bank for Agriculture and Rural Development (Agribank) is one of the profitable business units and the return on equity rate is above seven percent. However, according to the 2017 financial statement, Agribank invested more than 2.39 trillion dong in subsidiaries but dividends and profits received were only 12 billion dong. Five out of six subsidiaries accumulated losses and Agribank had to make provisions of more than 30 percent of the investment value.
Typically, ALC II suffered 12.464 trillion dong of losses and had made bankruptcy procedures while ALC I lost more than 713 billion dong and Securities of State Bank lost nearly 470 billion dong.
Agribank has also been realised as inappropriate debt classification as the State Auditor has reduced the debt balance of Group one by over 1.25 trillion dong, increased the outstanding loans of Group two, three and five by more than 1.355 trillion dong. In addition, the bank also made provision for credit losses that were inaccurate, violating regulations on capital contribution limits when the bank held shares of more than two other credit institutions. And the accounting of revenue, income and costs were not appropriate.
Also in this report, the State Audit stated that State Bank of Vietnam (SBV)’s monetary policy and banking operations in 2017 contributed to controlling inflation at 3.53%, economic growth of 6, 81 percent and credit growth of 18.17%. Audited financial and banking institutions all met safety standards, profit margin on capital of more than seven percent, profitable business and positive difference of revenue and expenditure.
However, SBV still has shortcomings such as the ratio of cash on total payment instruments in the period of 2011-2017 to nearly 12 percent but has not yet built a roadmap to reduce this rate to below 10 percent according Scheme on cashless payment development in the period 2016-2020.
The capital adequacy ratio (CAR) of the system is judged unreliable by some cross-bond investment banks as it is virtually improved. In addition, this coefficient excludes weak banks and the banks bought back by SBV at zero dong.
Some other banks such as Bao Viet Joint Stock Commercial Bank (BaoViet Bank), Southeast Asia Joint Stock Commercial Bank (Seabank), Nam A Joint Stock Commercial Bank (Nam A Bank), Vietnam Public Joint Stock Commercial Bank (PVcomBank) and Vietnam Thuong Tin Joint Stock Commercial Bank (Vietbank) also made mistakes when the credit growth exceeded the allowed level with the total outstanding loans of nearly seven trillion dong. The delayed settlement of interest rate support programmes and delayed collection of outstanding debts to repay the state budget still took place.
In 2017, the State Auditor said that the Social Policy Bank of Vietnam (VBSP) had cleared more than 95 billion dong of debts for nearly 9,200 customers considered missing according to the confirmation of the local People’s Committee and police. This according to the State Audit was not consistent with the provisions of the Civil Law. In particular, some customers still had health insurance cards, paid social insurance or visit relatives.
VBSP also did not negotiate the capital mobilisation fee with credit institutions but paid at the maximum rate prescribed by SBV (1.35%), affecting the compensation for difference of interest from the state budget.
