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Banking & Finance

Sacombank postpones AGM to June 30

Released at: 09:43, 25/05/2017

Sacombank postpones AGM to June 30

Photo: Sacombank

Bank's restructuring plan secured central bank approval on May 22.

by Quang Huy

In an announcement published on its website on May 24, Sacombank said it cannot hold its 2015 and 2016 annual general meeting (AGM) in May as expected, with a new date set for the end of June.

“Due to the incomplete preparations of AGM documents and personnel for the new Board of Directors and Supervisory Board during the 2017-2021 tenure, Sacombank will postpone the AGM, which was set for May 26, and expects to hold it on June 30,” the statement read.

This is the second time Sacombank has postponed its AGM, which was initially set for April 28.

The announcement also noted that the bank’s restructuring plan post-merger was approved by the State Bank of Vietnam on May 22, and its audited financial statements are currently being completed.

Sacombank is yet to publish its 2015 and 2016 audited financial statements.

It will send an invitation letter to shareholders and publish documents for the AGM within the prescribed time limit.

In addition to the bank’s current senior officials, including Chairman Kieu Huu Dung, the list of candidates for the new Sacombank Board for the 2017-2021 tenure includes Mr. Nguyen Van Huong, the recently-resigned Deputy Chairman of LienVietPostBank.

Mr. Huong is currently the Deputy Chairman of the year-old Vietnam Macadamia Association, a social and professional organization co-founded by LienVietPostBank and real estate giant the Him Lam JSC, which holds more than 30 per cent of LienVietPostBank.

Sacombank became the fifth-largest lender in the local banking sector in 2015 after its voluntary merger with Southern Bank. Previously among three private lenders with the highest annual net profits, the joint entity was supposed to bring greater benefits to Sacombank’s shareholders and customers. But the bank was hit almost instantly post-merger, with a pre-tax loss of VND671 billion ($29.5 million) in 2015’s fourth quarter, making its pre-tax profit for 2015 as a whole only VND1.29 trillion ($56.6 million), a fall of 55 per cent against 2014.

In its October 2016 report, Moody’s confirmed Sacombank’s “B3” long-term ratings and “caa1” BCA, and changed the outlook to negative. The confirmation of the caa1 BCA reflects the high solvency and liquidity risks faced by Sacombank post-merger.

The B3 long-term ratings of Sacombank were confirmed because Moody’s continues to incorporate one notch of uplift, based on the rating agency’s expectation of moderate support from the Vietnamese Government. The negative outlook on Sacombank’s ratings reflects the uncertainty around the strategic direction of the bank, its unclear ownership structure, and the true scope of asset quality challenges.

The bank posted an after-tax profit of VND210.5 billion ($9.28 million) in the first quarter of this year, a 30 per cent increase year-on-year, according to the bank’s latest financial report. Its bad debt ratio fell from 5.35 per cent at the end of 2016 to 4.88 per cent as at March 31, but remains the highest among its peers.

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