Banks rush to make financial investments

Tuesday, April 29, 2008
Although share prices slash, many shares have lost their liquidity, particularly bank shares are under high pressure because of unfavourable movements of the monetary market, many banks still plan to promote financial investments in addition to other business activities.
For example, the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) will set aside 650 billion dong to buy stake of potential companies, according to the bank's plan on using equity in 2008. Furthermore, Sacombank will newly establish some subsidiaries with total capital of 1.110 trillion dong. In 2007, Sacombank made some financial investments into such businesses as Truong Hai Automobile, Huu Lien A Chau Steel, Sacombank Investment Co Early March, Sacombank continued injecting another 25 billion dong into the Yersin Da Lat University.

Additionally, Sacombank plans to set up some affiliated companies such as a gold and jewellery company that has been licensed, an insurance company, a card joint venture with ANZ and others, aiming to form the Sacombank Finance Group to be slated for the middle of this year. In 2007, Sacombank reported strong growth of profit, much of which came from capital contribution into other economic organisations.

As for the Asia Commercial Joint Stock Bank (ACB), in addition to financial investments, in 2007 the bank gained significant profit. The bank will expand business fields, develop operations in new fields professionally and closely manage risks. ACB will also scale up existing subsidiaries. As scheduled, ACB will spend another one trillion dong making investments in the upcoming time, bringing total investment capital to two trillion dong. The bank will establish some affiliated companies such as ACB Capital, ACB Card Co, ACB Gold and Silver Co and others. With the establishment of new affiliated companies, ACB will further acquire stake of economic organisations in 2008.

ACB plans to spend some 1.13 trillion dong buying more shares of businesses, bringing total initial investment capital to 1.4 trillion dong. All these investments will be assigned to ACBS, the bank's securities affiliate.

According to Nguyen Thanh Toai, vice general director of ACB, the bank's financial investments this year will be channeled via affifliated companies of which ACBS will be assigned most capital. ACB will select those companies which have stable operations, high growth potential, strong financial status. The bank's capital will mainly be invested into IPO companies.

Although having modest operation scopes, Pacific Bank said that in addition to diversifying business activities, it will switch from credit-focused trend to financial investment. Pacific Bank will also establish some affiliated companies operating in different fields. According to Pacific Bank, promoting financial investments as well as relations with many financial, insurance institutions will help the bank have more capital and improve revenue of banking services.

With a plan on raising capital from 2.8 trillion dong to 7.4 trillion dong in 2008, the Vietnam Export and Import Commercial Joint Stock Bank (Eximbank) said that, a part of the new capital will be used to expand scopes and business fields. Additionally, Eximbank will increase financial investment items and portfolios.

The above fact demonstrates that many banks are looking forward to opportunities to develop new financial investments in 2008. However because of increasingly gloomy moves of the stock market and no sign of recovery, many banks have seemed to be worried and have not yet been able to develop new investments. (DTCK)