The report on auditing results released by the State Audit at the fifth meeting of the National Assembly XIV showed that banks have not divested capital following the roadmap for contributed capital exceeding the limit as prescribed in the Law on credit organisations (the capital contribution exceeds 11 percent of the chartered capital of the business receiving the contributed capital).
For example, BIDV has a capital contribution of 424.8 billion dong, accounting for 32.21 percent of the chartered capital of the Aircraft Leasing Joint Stock Company. Ocean Bank has 11.62 percent stake in Gia Dinh Investment and Development JSC, 13.37 percent stake in Duyen Hai PVC, and 15.63 percent stake in PetroVietnam Power Project Consultant JSC before the time that the State Bank made compulsory purchase.
The remarkable point, as reported, is that the financial investment of banks is not effective or has low efficiency. The State Audit also cited specific figures. For example, as at Ocean Bank, 12/39 investments with the capital contribution value of 411 billion dong from 2009-2011 to 2016 had no dividend payment and in 2016, dividends of 28 investments were not received. On December 31, 2016, the bank had to put 198 billion dong provision for 14 investments that the unit has suffered from losses over many years (five units are almost no longer in operation).
At BIDV, the State Audit said the bank invested 3.128 trillion dong in three subsidiaries, and 12 other long-term investments worth 280.2 billion dong did not receive dividend payment. BIDV Securities Company invested in five stock codes (CTG, DPM, PVS, THC, and GEX) and suffered from the loss of 239.62 billion dong. BIDV Insurance Corporation invested in shares of Dong Duong Xanh Development JSC since 2009 and put for provision 65.2 percent of investment value (16.89 billion dong).
Or for VietinBank, dividends and profits earned in 2016 was only equal to 4.1 percent of the investment. For Collective Bank, the recovery of the term deposit worth 585 billion dong at Handico Finance JSC since 2011 was very difficult.
Meanwhile, at Vietcombank, investments are also the same. Specifically, the bank invested 204.97 billion dong (equal to $9.265 million) in Vietcombank Monetary Transfer Company with the cumulative loss of $5.347 million as of December 31, 2016. However, this bank put for provision 103.7 billion dong, invested 135.15 billion dong in Vietcombank Securities Investment Fund Management Joint Venture Company with the accumulated loss as of December 31, 2016 at 12.8 billion dong. The bank also invested 270 billion dong in Vietcombank-Cardif Life Insurance Co., Ltd with the loss of 17.8 in 2016. In addition, there was another investment worth 123.45 billion dong in Saigon Cong Thuong Joint Stock Commercial Bank (Saigon Bank) with the dividend payment rate in 2016 at four percent and 70.95 billion dong was invested in Cement Finance Company (CFC) with no dividend in 2016.
However, in November 2017, Hanoi Securities Stock Exchange organised two auctions including 4.3 percent stake in Saigon Bank and 10.91 percent stake in CFC owned by Vietcombank. Among 20 investors, two investors including one institutional investor and one individual investor ordered to purchase Saigonbank shares at the price of more than 20,100 dong per share, an increase of 1.6 times from the starting price of 12,550 dong per share. With this price, Vietcombank earned 266 billion dong revenue and 143 billion dong profit compared to the book value.
Besides, though CFC’s auction was not successful like Saigonbank, it also helped Vietcombank earn the profit of 5.3 billion dong. This bank sold the entire 6.6 million shares with the average successful auction price of 11,554 dong per share, earning more than 76.2 billion dong. At the end of the two auctions, Vietcombank successfully divested from two credit organisations among five organisations it invested.
That is not to mention, in the middle of April, Vietcombank divested 66.7 billion dong, equal to 6.67 million shares by par value, accounting for about 1.36 percent of the chartered capital at Orient Commercial Joint Stock Bank (OCB) with the starting price of 13,000 dong per share. As a result, the auction sold out more than 6.67 million shares, equal to 100 percent of the auctioned shares with the average successful auction price of 25,771 dong per share. The total share value sold hit more than 171.9 billion dong.
After divesting from Saigon Bank, CFC and OCB, Vietcombank is holding more than 126 million MB shares, equal to 6.97 percent of chartered capital and more than 101 million shares of Eximbank, equal to 8.2 percent stake.
Circular No.36 stipulates that each credit organisation must not hold more than five percent stake in more than two credit organisations which means that Vietcombank will have to gradually reduce the ownership rate at these two banks.
Regarding the two aforementioned issues, a senior leader of the State Bank said financial investments of banks were carried out before 2011 and until 2011 there was a law to limit non-core investment of banks.
“In fact, the capital divestment from banks cannot be carried out quickly. For example, Ocean Bank is currently the 100 percent state-owned bank so when divesting, the procedures will be very complicated”, said the State Bank leader.
