|The previous banking scandal left quite a "smudge" on NCB's reputation|
A remarkable number of small-scale banks (market capitalisation of trillions of Vietnamese dong) reported modest profits of dozen billions of Vietnamese dong, failing to achieve their target and distressing their CEOs especially as the season of AGMs is just around the corner.
Specifically, over the span of 2017, National Commercial Bank (NCB) achieved merely VND30 billion ($1.32 million) in pre-tax profit, which resulted in the heavy decline in the price of the bank’s stock. Additionally, the scandal of former NCB heads “deliberately violating state regulations on economic management, causing severe consequences” had dented the bank’s reputation.
In 2017, VietABank was reported to acquire a meagre VND150 billion ($6.6 million) in pre-tax profit, which was equivalent to only 59 per cent of the target VND253 billion ($11.13 million). In addition, the commercial bank’s shareholders expressed deep anxiety over critically low credit growth and capital mobilisation, as well as the bank’s failure to accomplish the targeted capital of VND4.2 trillion ($184.8 million).
|A remarkable number of small-scale banks (market capitalisation of trillions of Vietnamese dong) reported modest profits of dozen billions of Vietnamese dong, failing to achieve their target and distressing their CEOs especially as the season of AGMs is just around the corner.|
Likewise, in 2017, VietBank reported total profits of VND263 billion ($11.57 million), yet the commercial bank could barely break even due to the huge accumulated loss of VND262 billion ($11.52 million) transferred over from 2016. By the end of 2017, the commercial bank reported undistributed profits of only VND0.4 billion ($17,600).
Dr Nguyen Tri Hieu, a Vietnamese economist, noted that the amended Law on Credit Institutions took effect from January 2018, providing legal support for commercial banks, especially those with rather poor financial performance. He further added that small-scale commercial banks must accelerate the restructuring process in order to avoid declaring bankruptcy.
To date, over the first few days of the AGM season, numerous small-scale commercial banks, such as NamABank, SaigonBank, and Saigon Commercial Bank (SCB) failed to publish their financial statements for 2017.