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Banking & Finance

Warning status on EIB shares extended

Released at: 15:14, 11/09/2016

Warning status on EIB shares extended

Photo: Duc Anh

HoSE extends status as bank fails to address losses.

by Duy Anh

Shares of the Vietnam Commercial Export and Import Bank (Eximbank) will continue to bear a warning status after the bank reported retained losses of VND756.8 billion ($33.9 million) as at June 30.

The share was first given a warning status by the Ho Chi Minh City Stock Exchange (HoSE) on April 8 because of its retained losses, which it has failed to address.

HoSE will now consider the next step in reviewing Eximbank’s status based on the bank’s audited consolidated financial statements for 2016.

Eximbank’s after-tax profit for the first six months of this year reached VND60.7 billion ($2.7 million), with retained losses of VND756.8 billion ($33.9 million).

As at June 30 the bank’s lending balance stood at VND80.8 trillion ($3.6 billion), down 4.62 per cent compared to the end of 2015. Its credit balance was VND100.7 trillion ($4.5 billion), up 2.33 per cent compared to the end of 2015, with total assets at VND121.7 trillion ($5.4 billion), down 3.3 per cent.

Net operating profit in the second quarter was VND372 billion ($16.7 million), up 90 per cent year-on-year. Credit risk provisions, however, doubled, to VND324 billion ($14.5 million) as at June 30.

After deducting costs and credit risk provisions, Eximbank’s pre-tax profit for the second quarter stood at VND49 billion ($2.2 million), a 69 per cent increase year-on-year. Despite the fine result its pre-tax profit for the first half reached just VND79 billion ($3.5 million), a fall of 88 per cent year-on-year.

Bad debts stood at VND4.3 trillion ($192.8 million) as at June 30, equal to 5.3 per cent of the total and up significantly from the 2 per cent recorded at the end of last year.

As at June 30, sub-prime debts were VND2.4 billion ($107.6 million), accounting for more than half of all bad debts and 13-times higher than at the end of 2015. Doubtful debts stood at VND797 billion ($35.7 million), up 34.8 per cent compared to the end of last year while potentially irrecoverable debts were reported at VND1.07 trillion ($48 million).

On July 18 the bank announced adjustments to its 2016’s financial targets. Pre-tax profit was adjusted to VND400 billion ($18 million), down 44 per cent from the initial target of VND720 billion ($32.3 million). The target for total assets for the year was adjusted to VND134 trillion ($6 billion), down 6 per cent from the initial VND142.5 trillion ($6.4 billion).

The credit balance target was adjusted to VND108 trillion ($4.8 billion), down from the original VND113.5 trillion ($5.1 billion), while the lending balance target was adjusted to VND100 trillion ($4.5 billion), down from VND105.8 trillion ($4.7 billion).

The adjustments were to be announced to shareholders at an extraordinary shareholders meeting on August 2. However, the State Bank of Vietnam (SBV) on July 29 requested Eximbank check information regarding shareholder group rights to nominate candidates to its board. Eximbank was therefore forced to postpone the meeting to a date to be decided, according to a document signed by CEO and Board Member Mr. Le Van Quyet and posted on the State Securities Commission and HoSE websites.

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