Oriential Bank cooperates with SPT in telecom postage collection

Wednesday, April 16, 2008
Oriential Commercial Joint Stock Bank (OCB) and Saigon Posts and Telecommunications Service Joint Stock Corp (SPT)'s Customer Service Centre recently signed an agreement whereby OCB will collect telecom service postage for SPT via its branches and transaction offices from April 16.
SPT's customers will pay cost of telecom services via these sites. Through the postage note or information supplied by customers, OCB will carry out cost collection and provide specialised added value receipt of SPT to customers.

Sacombank Group to debut next month

Wednesday, April 16, 2008
Sacombank Group plans to maker its debut next month and specialise in the field of finance services, said Dang Van Thanh, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)'s director board's chief.
As reported, Sacombank received license to set up Jewellery Co and plans to introduce card joint venture Co with ANZ in the forthcoming time. Its insurance arm will be launched by 2009.
Up to March 31, 2008, Sacombank's total asset reached 75.2 trillion dong, total deposits 65.348 trillion dong and lending 41.666 trillion dong. Its ownership capital gained 6.314 trillion dong.
At present, Sacombank has established arms of securities, real estate and financial leasing. (DTCK)

Banks in Q1 profit slump

Wednesday, April 16, 2008
Profit growth of banks, compared to the same period last year, are presenting slow-down signals this year. The main reason for business results of banks in first months of this year is unstable movements of the monetary market. Credit tightening policies in order to rein inflation that have been applied in the first quarter have adversely impacted banking activities. Notably, the central bank's limiting dong supply, withdrawing money from circulation has forced commercial banks to increase deposit interest rates sharply in a bid to ensure their liquidity. The growth of input costs has made banks impossible to maintain revenue and profit as high as previous years.
Namely, by the end of March, the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) reached 435 trillion dong in pre-tax profit, a year-on-year increase of 44%, 75.205 trillion dong in total assets, rising by 135% against the first quarter of last year, 65.445 trillion dong in deposits, a year-on-year growth of 133% and 41.665 trillion dong in total outstanding loans, up by 141% against the end of March in 2007. Meanwhile, by the end of January 2007, the bank reported a pre-tax profit of 302 billion dong, up by 188% against a year earlier. According to a senior official of Sacombank, if Sacombank's profit in the first three months increased more slowly than previous years, that was because of different factors. According to Sacombank's plan approved by the recent shareholder meeting, the bank targeted a pre-tax profit of two trillion dong in 2008, nearly 500 billion dong lower than the initial target and up by only 38% against last year. Meanwhile, Sacombank reported a pre-tax profit of 1.452 trillion dong in 2007, a year-on-year increase of 167%.

By the end of the first quarter, Eximbank's pre-tax profit was estimated at 264.6 billion dong, rising by 54% against last year while in the first quarter of 2007, Eximbank's pre-tax profit was 2.6 times as much as the figure of 2006, reaching 177 billion dong. Eximbank targeted a pre-tax profit of 1.3-1.5 trillion dong this year, nearly doubling the figure of 2007. However, with complicated movements of the monetary market in first months of this year, the bank's activities will be adversely impacted in the upcoming time. Eximbank also said that it will find difficult to fulfil the above targets.

Similarly, Ly Xuan Hai, general director of the Asia Commercial Joint Stock Bank (ACB), closing March, ACB posted 501 billion dong in pre-tax profit compared to 413 billion dong in the first quarter of last year. According to ACB's plan passed by the recent shareholder meeting, the bank targeted to reach a pre-tax profit of 2.5 trillion dong in 2008, 500 billion dong higher than last year but some 300 billion dong lower than the initial target. ACB's pre-tax profit in 2007 was 2.127 trillion dong, three times as much as the figure of 2006. Nevertheless, ACB said that the bank will gain a pre-tax profit higher than the targeted figure.

Not only commercial joint stock banks, profit growth of many small-scaled banks in the first quarter also signalled a year-on-year reduction. The Viet A Bank gained a pre-tax profit of 96.5 billion dong in the first quarter. The bank had initially targeted a pre-tax profit of 370 billion dong in 2008, which was then cut to only 290 billion dong. As for the An Binh Commercial Joint Stock Bank (ABBank), the initial target of pre-tax profit had been 555 billion dong however this figure was then lowered to some 400 billion dong. Although having not yet specific figures of business results in the first three months, Luu Duc Khanh, general director of ABBank, admitted that his bank's pre-tax profit in the first quarter would surely be not as much as last year.

According to a reliable source of news, in addition to banks with slow growth of profit, some banks ran a loss after the recent dong crisis. The reason was that banks strongly offered loans in 2007. By early 2008 when the market was scarce of dong, clients tended to switch their capital to other banks, banks had to borrow capital from the interbank market with overly high interest rates of 38-40% a year in order to meet liquidity.

A general director of a HCM City-based commercial joint stock bank said that the slow growth of profit at banks in the first three months was attributed to the serious shortage of dong. Furthermore, that banks raised deposit interest rates to meet demand and supply pushed input costs. On the other hand, the first quarter had many festivals, holidays, demand for capital as well as financial services of clients was less, which impacting revenue and profit of banks. However, the general director also admitted that compared to last year, banks are facing up more difficulties. It is likely that macro-management policies, inflation curbing policies of the central bank will further affect business results of banks. (DTCK)

FPT signs software export contracts worth 6 million USD

Tuesday, April 15, 2008
The FPT Corporation signed three with foreign partners contracts in software processing and export worth nearly 6 million USD in the first quarter of 2008, said FPT deputy general director Bui Quang Ngoc.
A 3.5 million USD contract between FPT and US-based Agilis Solutions is among the biggest software export contract ever signed between Viet Nam and the US .
The FPT information system company under FPT Corporation also won two contract deals worth 13.5 million USD to supply and install ATM devices for two banks in Viet Nam. (VNA)

Vietcombank listing seems unlikely

Tuesday, April 15, 2008
Vietcombank, which made an initial public offering last year, is not likely to list in Ho Chi Minh as scheduled next June since its stock’s unofficial price is now at half the IPO price, according to local analysts.
“The bank’s IPO price is VND107,860 while its market price [on the informal over-the-counter market] is now VND55,000-58,000; so at what price will it trade on the exchange?” a financial expert in Ho Chi Minh City asked, adding, “Vietcombank surely won’t be able to list in June.”
The Hanoi-based bank raised around VND10.5 trillion (US$656 million) through the IPO which valued the bank at around $10 billion.
Vietcombank, known formally as the Bank for Foreign Trade of Vietnam, sold 97.5 million shares at an average price of VND107,860 against a starting price of VND100,000.
The move came as part of agovernment drive to open up the banking sector under which four more state-run banks are due to sell their shares list on the stock market this year.
Before the IPO, General Electric, Nomura and Goldman Sachs, which sought to become Vietcombank’s strategic partner, valued the lender’s share at VND42,000-65,000.
The bank said the price was too low and could cause a loss to the government, and delayed selling stakes to foreign strategic partners, instead going ahead with the share auction first.
“We will sell stakes to strategic partners at a price which won’t be lower than the IPO price,” an official from the state-owned bank told a press briefing after the auction.
A financial expert in Ho Chi Minh City said Vietcombank should have sold stakes to the strategic partners.
“Even the bank’s staff are suffering losses now since they paid more than VND60,000 for a share, higher than the current market price,” he said.
VIETCOMBANK FACTBOX
■ Vietcombank reported its assets rose 14 percent to VND196.12 trillion (US$12.2 billion) last year.
The Hanoi-based bank said loans surged 44 percent to VND95.58 trillion ($5.97 billion), less than 1.3 percent of which were bad.
■ It attracted deposits of VND143.64 trillion ($8.97 billion), up 20 percent from 2006.
The bank reported a gross profit of VND3.1 trillion ($193.65 million) but did not release the comparable figure or net profit for 2006.
■ The bank handled export and import payments worth $26 billion last year, a 14 percent rise and equivalent to 26.6 percent of the country’s external trade.
■ The bank admitted last month that profit would fall in 2007 due to mounting competition from more than 30 partly private and 28 foreign banks which hit revenues and increased costs.
■ It plans to list in Hong Kong or Singapore next year.

Viet Nam money: lending rates seen easing further

Tuesday, April 15, 2008
Interest rates on Vietnamese dong loans are expected to ease further this week after BIDV, the country's second-largest lender, announced it would lower rates, the central bank and bankers said.
Lending rates surged in February to 30-40% as the central bank tightened liquidity to combat inflation that hit nearly 20% in March.
Liquidity has since stabilised prompting the State Bank of Vietnam, or the central bank, to cap bank dong deposit rates at 12% and then the banking industry to lower the cap to 11%.
After deposit rates started to ease, lending rates followed suit this month.
The central bank said Dong A Bank, Sacombank STB.HM and Eximbank have cut their monthly lending rates by between 0.05-0.2 percentage point.
Rates on dollar loans were stable, the central bank said in a report reviewing banking activities in the week to last Friday.
But BIDV is pushing lending rates lower.
Chairman Tran Bac Ha announced on Thursday that his bank would cut dong loans by between 1.8-2.5 percentage point from Tuesday and lower its ceiling on dong loans to 15.5% from 18.5% now.
BIDV also said in a statement it would lower the ceiling on dollar loans to 8.5% from 10.6% now.
Vietnam has more than 40 banks, but BIDV and three other state-run banks altogether handle 70 percent of market deposits and lending.
On the interbank market on Monday, major lenders, including BIDV, offered overnight dong loans in a wide range of 5% to 9.5%, against 7.5-9.5% a week ago and 4-7% at the end of March VNIBOR.
Their six-month loans narrowed to 10-11% from 9.5% to 14% on March 31.
Vietnam's central bank let the dong to gain slightly against a broadly stronger dollar on Monday. It set the official exchange rate at 15,955 dong per dollar, or 5 dong up from a week ago and nearly 1% up from 16,114 dong per dollar at the end of 2007.
Last week, the central bank tightened lending in foreign currencies by narrowing the borrowing criteria for foreign exchange loans to try to ease a dollar shortage at commercial banks. (Reuters)

Pacific Air sees revenues doubling in '08

Tuesday, April 15, 2008
Pacific Air sees revenues doubling in '08
Pacific Airlines, Viet Nam's second-largest, expects revenues to double this year to $145 million as it joins Australia's Jetstar Airways to explore domestic and regional markets, its chief executive officer said Monday.
Pacific Airlines will become Jetstar Pacific next month, adding five aircraft to its fleet this year and another five in 2009 to serve new routes at home and to nearby countries in Asia, Luong Hoai Nam told Reuters.
Jetstar is a low-cost airline of Australia's Qantas group which bought an 18 percent stake in Pacific Airlines last year. The stake would be increased to 30 percent by 2010, Qantas has said. (Reuters)

Oricombank says 2007 net jumps 62.6 pct

Tuesday, April 15, 2008
Oricombank says 2007 net jumps 62.6 pct
Oricombank, 10% owned by France's BNP Paribas, said its net profit surged 62.6% last year to VND168.59 billion ($10.6 million) thanks to strong lending.
The Ho Chi Minh City-based Oricombank, also known as Phuong Dong Commercial Bank, said its audited assets jumped 82.6% last year to VND11.76 trillion, of which loans rose 62.2% to VND7.56 trillion, it said in a statement.
The statement did not say what proportion of the unlisted bank's loans was bad.
One of Vietnam's 35 partly private banks, only Oricombank and eight others have sold shares to foreign banks as they sought expertise and greater business opportunities in the country's fast-developing economy.
BNP Paribas bought its 10-percent stake in Oricombank last year and said it wanted to double it to 20 percent.
Viet Nam caps foreign ownership in a domestic bank at 30%, with a 15-percent limit for an individual strategic investor. Such a strategic investor needs government approval to increase his stake to 20%.
Vietcombank, the country's third-largest bank by assets and the first among its five-state-run banks to conduct an initial public offering last December, owns 8.7% in Oricombank.
Top brewer Saigon Beer Alcohol Beverage Corp (Sabeco) also has a 5-percent stake in Oricombank.
Oricombank has planned to issue convertible bonds to raise VND1.2 trillion this year so it could nearly double its registered capital to VND2 trillion. (Reuters)

Mai Linh unit to increase cab fleet to 550 this year

Tuesday, April 15, 2008
Mai Linh unit to increase cab fleet to 550 this year
Mai Linh Bac Trung Bo Joint-Stock Company, a subsidiary of the Mai Linh Corporation, has announced its plan to raise the number of operated cabs to 550 in 2008, and to 1,000 by 2012.
The firm, founded in 2000, also expects to earn VND24.52 billion (US$1.5 million) in profits this year, it said at its annual shareholders’ meeting.
Last year its chartered capital reached VND268 billion ($16.6 million) and net profit rose by 5.82 times to VND3.5 billion.
Mai Linh Corporation is the country’s top name in transport services. (TN)

PVD’S deputy general director to sell 10,000 shares

Tuesday, April 15, 2008
PVD’S deputy general director to sell 10,000 shares
PetroVietnam Drilling and Well Services Joint Stock Co., one of the 10 largest stocks on the Ho Chi Minh Stock Exchange, said its deputy general director would reduce his stake to 21,863 shares by selling 10,000 shares.
The sales, due to start on April 16, will conclude on June 30, the exchange said on its website.
The firm, which offers technical services for the oil and natural gas industry, lost VND2,000, or 1.77 percent, to close at VND111,000 on Friday.
Its share price has fallen 27.5% this year.
PetroVietnam Drilling and Well Services, which trades on the market under the code of PVD, also announced it had earned a net profit of VND170 billion (US$10.5 million) in last year’s fourth quarter. (TN)

WTO not the cause of inflation, says economic expert

Tuesday, April 15, 2008
WTO not the cause of inflation, says economic expert
Viet Nam’s inflation crisis is caused by long-term global problems, not WTO membership, a senior economic expert and former head of the Central Institute for Economic Management Le Dang Doanh says in an interview.
The government has implemented several measures to battle inflation.
At the conference “The Impact of WTO participation on Vietnamese Economics and Society,” which you recently attended, several economic experts agreed that the country’s participation in the WTO should not be blamed for inflation. What are your thoughts?
Le Dang Doanh: We should look at the country’s economic picture as a whole, and not peel off one leading cause of this situation – either Vietnam’s participation in the World Trade Organization (WTO) and ASEAN Free Trade Area (AFTA) or its bilateral trade agreement with America.
It’s important to realize that Vietnam had initiated a series of economic reforms before joining WTO and we did not see their effects until after the country’s admittance to the organization.

It’s unfortunate that following Viet Nam’s accession to the WTO, the world crude oil price topped US$110 per barrel and rice prices also jumped.

The prices of essential raw materials climbed as well, many people mistakenly thought that Vietnam had suffered the consequences of export inflation because of the WTO.

I certainly disagree.

Without being admitted to the WTO, the magnitude of these problems could even be even worse.

We might have just continued importing gasoline and oil products while watching prices climb and it would have been even more difficult to battle inflation.

You mentioned at least twice before that we have been slow in reacting to this type of economic turmoil. How do you assess the government’s reactions to inflation this time around?

I think in 2007, we did not respond quickly and effectively enough and that’s why inflation has risen this high.

By the first quarter of 2008, we realized that it was time to act but there weren’t any coordinated measures among government agencies and ministries.

Some of the measures were counter productive, including the central bank’s request for interest rate hikes, the increase of banks’ reserve requirements and the issuance of compulsory Treasury bills while not buying US dollars from local exporters.

I’ve realized that the government has made some changes, however, it’s critical for government officials to consult companies before fixing any policy.

In this inflation battle, no monetary policy can satisfy all components of the economy.

The government must lead the way by example.

It could do this by saving, through lowering the amount of public funds being poured into stalled state projects.

The flow of such funds should be announced to the National Assembly, to each people’s committee and to the public.

We should strive to stabilize our growth rate instead of continuing with growth we can’t keep up with.

Can you comment on reducing our growth rate from 9% to 7.5%?

I want to emphasize that a large number of world economies are slumping.

Even the world’s biggest economic player, the United States, has adjusted its growth rate goal, so it’s inevitable that we adjust ours.

Since our economy depends 70% on exporting, we are obviously hurt when our export markets are hurt.

I think the maximum growth rate we could strive for is 7.5% – not 8 or 8.5%.

The public should sympathize with the government in its efforts.

It’s possible that the situation could get worse over the second quarter. (Lao Dong)

MobiFone to apply soon for 3G licence

Tuesday, April 15, 2008
MobiFone to apply soon for 3G licence
The Viet Nam Mobile Telecom Services Company (VMS) which operates the Mobifone network has announced it will apply for a 3G licence next month.
According to VMS General Director Le Ngoc Minh, the Ministry of Information and Communications will kick off its 3G licensing process in May.
"We’ve almost fulfilled preparations for financial resources, and an infrastructural platform and management to offer 3G services in the near future," said Minh.
MobiFone is collaborating with France Telecom to showcase the latter’s 3G services during an exhibition at the Phu Tho Stadium in District 11 that will run until tomorrow.
The expo is part of the on-going French Week in the city.
"We’re confident that our group has the right experience and expertise to become MobiFone’s strategic partner," said Anne Bouverot, France Telecom’s executive vice-president for International Business Development.

The French firm has provided 3G services to European customers since 2004, mostly under the Orange brand.

With their hand sets, its subscribers have access to services including 62 TV channels, over 20 radio stations and a music catalogue with more than one million titles and online games. (VNS)

Group set up to supervise monetary market

Tuesday, April 15, 2008
Group set up to supervise monetary market
The governor of the State Bank of Viet Nam has signed a decision on the establishment of a Monetary Market Supervision Group headed by standing deputy governor Tran Minh Tuan.
The move is among the bank’s activities to implement the Prime Minister’s instructions on measures to curb inflation and control price hike in 2008.
The group is responsible to supervise the monetary market, update market information and offer analysis and assessment of the market situation so as to provide advisory services to the SBV governor to release suitable measures.
Mr Duong Quoc Anh, head of the Department for Banks and Non-bank Credit Organisations is the standing deputy head of the group. Other members of the group include leaders of seven units: the Department of Foreign Exchanges Management, SBV’s Inspectorate, the Department of Monetary Policies, Credit Department, the SBV Transaction Centre, and SBV Branches in Hanoi and Ho Chi Minh City.

MB and SUDICO join hands

Tuesday, April 15, 2008
MB and SUDICO join hands
The Military Commercial Joint Stock Bank (MB) and Song Da Industrial And Urban Investment Joint Stock Co, SUDICO, have lately inked a cooperative memorandum of understanding in Hanoi.
Under the agreement, MB will directly or together with other credit institutions provide capital for SUDICO to carry out property projects.
The bank’s services and insurance programmes offered through its service will be made prior to SUDICO’s staff and customers.
In return, MB ATMs will be placed in buildings of SUDICO.