The documents recently announced at the Annual general Meeting (AGM) of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) showed that in 2018, the bank’s consolidated pre-tax profit reached 2.247 trillion dong, up by 50.6 percent. Its total assets were 406.041 trillion dong, outstanding credit was 257.172 trillion dong, and bad debt ratio was only 2.11 percent, down by up to 2.48 percent compared to the previous year.
Sacombank’s profitability indicators improved significantly. In particular, the ratio of Return on average assets (ROAa) and Return on average equity (ROEa) respectively reached 0.46 percent and 7.48 percent, higher than the 0.34 percent and 5.2 percent recorded in 2017. The bank’s basic Earnings per share (EPS) reached 780 dong per share, improved compared to the 555 dong per share in 2017.
The consolidated capital adequacy ratio of Sacombank was 11.88 percent, up by 0.58 percent over 2017 and higher than the prescribed minimum limit of nine percent. The ratio of short-term capital used for medium and long-term lending was 37.41 percent, complying with the maximum 45 percent limit required by the State Bank of Vietnam (SBV). The bank’s Loan to deposit ratio was 70.12 percent, not exceeding the maximum limit of 80 percent.
Not having positive results like the parent bank, the profit of some of the bank’s subsidiaries was not as expected. For example, the bank’s remittance company (SBR) suffered a loss of 4.2 billion dong, its jewellery company (SBJ) suffered a loss of 8.7 billion dong, and Sacombank Cambodia also recorded a loss of 14.4 million US dollars.
Having a more positive results, Sacombank financial leasing company (SBL) saw a profit of 65.9 billion dong, while Sacombank Laos gained 1.3 million US dollars, and Sacombank debt and asset management company (SBA) earned 93.6 billion dong.
Sacombank’s Board of management said that after nearly two years of implementing the restructuring plan after the merger, Sacombank has completed the key objectives of the scheme ahead of time.
However, the bank’s leaders also acknowledged that there are still many existing problems, such as the bank’s unprofitable asset value, the time-consuming process of recovering and handling collateral with heavy dependence on real estate market developments. The low credit growth has limited the opportunity to increase income to be able to quickly handle existing balances.
The bank’s leader also said that the no dividend payment which has been maintained since the merger until now is due to the reason that the bank has to focus on restructuring and handling financial backlogs. That leads to unsatisfied psychology of most shareholders.
According to the report on the profit distribution plan for the 2018 fiscal year, Sacombank’s shareholders will continue to not receive any dividend due to the need to concentrate on restructuring.
Sacombank’s pressure to raise capital is increasing when the dead line to apply the Basel II standards in 2020 is approaching, in the context when calling for capital remains difficult.
