Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) has just announced its consolidated financial statements for Q2/2019.
For Sacombank, the situation of bad debt handling is currently the most important issue, besides maintaining and developing business activities to avoid being left behind in the process of handling bad debts.
According to the report, as of the end of June 30, 2019, the bank’s loan balance reached 279.420 trillion dong, up 8.9 percent after six months.
Internal Nonperforming Loan (NPL) ratio was 2.04 percent, down from 2.2 percent at the beginning of the year.
Regarding external NPLs at VAMC, at the beginning of the year, total unpaid NPLs at VAMC was 37.664 trillion dong, taking up the entire item “Debt securities issued by domestic financial institutions”.
Sacombank’s Q2/2019 consolidated financial statements did not specify bad debts at VAMC. However, if the entire item “Debt securities issued by domestic financial institutions” was bad debt at VAMC as at the beginning of the year, the total unpaid bad debt at VAMC by the end of June 30, 2019 was 35.516 trillion dong, decreased by more than 2.1 trillion dong compared to the beginning of the year.
Generally, if including internal and external NPLs at VAMC, Sacombank’s bad debt ratio as of the end of June 30, 2019 was about 13.1 percent, down from 14.7 percent at the beginning of the year.
Although this rate was still high, the decrease of 1.6 percent after six months was still very encouraging. Compared to 19.6 percent at the beginning of 2018, we can see that Sacombank’s bad debt ratio was in a clear downward trend.
Not only the internal and external NPLs ratio, the amount of potential bad debt of Sacombank was also likely to decrease in the first six months of this year. Interest and fee receivables decreased nearly 1.9 trillion dong and receivable decreased by nearly 2.2 trillion dong. However, these two items were still high, respectively 21.561 trillion dong and 21.26 trillion dong, indicating that handling bad debts would still be very difficult for Sacombank in the coming years.
Along with the process of handling bad debts and improving asset quality, Sacombank also continued to maintain and develop its business.
In the first six months of 2019, credit business brought about 4.48 trillion dong of net income to Sacombank, up 30 percent compared to the same period last year. Meanwhile, the service business brought 1.383 trillion dong of net income, up 22 percent; foreign exchange business brought 220 billion dong of net income, up by 38 percent. Other activities brought about 730 billion dong of net income, up 240 percent.
Ending the first six months, Sacombank recorded 2.507 billion dong of net profit, up 66 percent compared to the same period last year. However, due to doubling the provision for credit risk, the bank’s pre-tax profit increased 47 percent to 1.461 trillion dong.
