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Banking & Finance

SCB earns profit of $3 million in Q2

Released at: 09:51, 11/08/2016

SCB earns profit of $3 million in Q2

Major turnaround underway given loss in Q2 2015.

by Duy Anh

Saigon Commercial Bank (SCB) has released its consolidated financial statement for the second quarter of 2016, revealing after-tax profit of VND67 billion ($3 million) compared to a loss of VND7.7 billion ($345,345) reported in the second quarter of last year.

As at June 30, SCB’s total assets stood at VND340 trillion ($15.2 billion), up 9 per cent since December 31, 2015. Total lending was VND200 trillion ($8.97 billion), up 17.6 per cent, while total deposits reached VND287 trillion ($12.9 billion), up 12 per cent.

Operating revenue during the second quarter stood at VND1.18 trillion ($52.9 million), up 59 per cent year-on-year. Most of its operating activities grew, according to the report.

Profit from banking services increased significantly, from VND18 billion ($807,300) in the second quarter of 2015 to VND236 billion ($10.6 million) in the second quarter of this year. Stock investments recorded a profit of VND174 billion ($7.8 million), up 26 per cent year-on-year.

Profit from other activities stood at VND97 billion ($4.4 million), a seven-fold increase year-on-year. Only foreign currency trading saw a loss, of VND47 billion ($2.1 million), compared to a profit of VND52 billion ($2.3 million) in the second quarter of last year.

Operating expenses were down 4 per cent to VND527 billion ($23.6 million). Credit risk provision rose significantly, from VND420 billion ($18.8 million) in the second quarter of last year to VND1.04 trillion ($46.6 million) in the second quarter of this year, equal to 92 per cent of the bank’s pre-provision operating profit (PPOE).

Pre-tax profit was VND81 billion ($3.6 million). Consolidated after-tax profit in the quarter of VND67 billion ($3 million) was a major improvement on the VND7.7 billion ($345,345) loss recorded the second quarter of last year. In the first half SCB therefore recorded after-tax profit of VND94 billion ($4.2 million), double the result in the same period last year.

Fixed assets fell slightly year-on-year, from VND3.96 trillion ($177.6 million) to VND3.94 trillion ($176.7 million).  

Other assets stood at VND51.5 trillion ($2.31 billion) as at June 30, equal to 15 per cent of the bank’s total assets. Its accounts receivable were VND19.2 trillion ($861.1 million) and accrued interest was VND32.1 trillion ($1.44 billion), up 16 per cent compared to December 31, 2015.

Accounts receivables and accrued interest of the bank as at the end of June therefore stood at VND51.3 trillion ($2.3 billion), considered “abnormally” high.

The bank is currently undergoing a reform process. CEO Vo Tan Hoang told the annual general meeting in April that “the selling of bad debts to VAMC is an effective solution for SCB to overcome difficulties during the reform period. SCB’s risk provision has accounted for 40 per cent of total bad debts and is expected to account for 80 per cent of total bad debts in the next two years.”

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