According to a document submitted to the Annual general Meeting of Shareholders at the end of June, the Board of Supervisors of the Vietnam Export Import Commercial Joint Stock Bank (Eximbank) ad assessed that whether the leading indicators of operational prudential ratios last year met the standards of the State Bank of Vietnam (SBV). However, the proportion of securities balance to total balance amounted to 6.04%.
Eximbank’s Board of Supervisors said that this target exceeded the limit five percent was because seven customers mortgaged STB shares of Saigon Thuong Tin Commercial Bank (Sacombank) to buy EIB shares with a total outstanding debt of 746 billion dong.
In the audited financial statements, Eximbank was recording this item in the sub-prime debt group. If the bank had made a provision with these amounts in 2019, the requirement for credit losses would increase by 175 billion dong, and profit after tax would decrease by 140 billion dong.
Eximbank also sued seven customers for recovery, but until the end of last year, the court ruled only five customers with a total outstanding debt of 500 billion dong. In particular, three customers were sentenced by the appeal court to return 417 billion dong of principal and interest to the bank. The two other customers also had to pay the principal and interest of 294 billion dong, but they appealed about the interest calculation.
Eximbank said that if customers did not pay, the bank would sell collaterals to recover debts. SBV also approved Eximbank to handle 75.9 million of these shares to recover debts. Thus, this year, the management board would accelerate this progress.
Eximbank targeted this year to increase total assets by five percent to 176 trillion dong. Fund mobilisation from economic organisations and people reached 147.8 trillion dong, rising by six percent from the previous year. The non-performing loan (NPL) ratio was below two percent and profit before tax increased by 20 percent to approximately 1.32 trillion dong. The bank also planned to accelerate the handling of outstanding debts, repurchase all mortgages sold to Vietnam Asset Management Company (VAMC) in line with the restructuring orientation of SBV.
The operation of the board of directors, according to the evaluation of the control board, was lacking rhythm. The members of the Board of directors still had many conflicting opinions. Meetings usually last long without a final decision being made. This caused many delays, such as the appointment of the general director, the legal representative, and the annual, extraordinary general meeting of shareholders.
Eximbank’s 2019 Annual general Meeting of Shareholders held twice, but all failed, so the business targets were not yet approved. Shortly, the bank would hold an annual meeting in 2020 and carry an extraordinary meeting for 2019 on the same day.
