Meeting held to discuss changes to BoM and business performance.
The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) held an extraordinary general meeting on December 15 regarding the recovery of the bank over the next few years as it needs to improve its business performance and its Board of Management needs to be changed.
Poor October and November performance
As at November 30 Eximbank had recorded profit of VND552 billion ($24.49 million) this year, accounting for 55.2 per cent of the annual plan. In the third quarter financial report its profit before tax was stated as VND667 billion ($29.60 million), but the figures in the report for this general meeting put profit before tax in the first eleven months at only VND552 billion ($24.49 million), meaning it lost some VND125 billion ($5.54 million) in October and November.
Total operating income was VND1.72 trillion ($76.33 million) and provisions and allowances for credit losses was set at VND1.17 trillion ($51.92 million). The bank is expected to increase its provisions before the end of the year.
Total assets as at November 11 were VND127.07 trillion ($5.63 billion), a decline of 21.15 per cent since January 1 and representing 70.6 per cent of the annual plan. Capital mobilization from the interbank market reached VND35.54 trillion ($1.57 billion) while capital mobilized from customers totaled VND101.28 trillion ($4.49 billion), a decline of 0.2 per cent since January 1 and accounting for 80.4 per cent of the annual plan.
Total credit granted was VND96.05 trillion ($4.26 billion), a decline of 1.9 per cent since January 1 and 88.3 per cent of the annual plan.
In the first eleven months of the year non-performing loans were VND1.53 trillion ($67.9 million), a fall of 28 per cent since January 1 and accounting for 1.82 per cent of total loans. The bank also sold some VND2 trillion ($88.76 million) of non-performing loans this year to the Vietnam Asset Management Company (VAMC).
Ms. Van Thai Bao Nhi, Deputy General Director of Eximbank, was quote as telling the meeting that the Banking Supervision Agency of the State Bank of Vietnam has conducted an inspection at the bank. Certain shareholders were found to have exceeded the cross-ownership ceiling of 5 per cent between Eximbank and Sacombank. In the future Eximbank will therefore divest from Sacombank.
The inspection also identified fraud regarding the business activities of Eximland. Eximbank lent funds to Eximland and Eximland then used the loan to buy real estate from Eximbank. Eximbank’s closing account increased its income as at December 31, 2013 by VND1.11 trillion ($49.26 million), on which it paid tax, set risk provisions, and paid dividends to shareholders from 2010 to 2013.
The inspection team said that the closing of the booking account for that income while Eximbank is still managing and using the real estate does not follow the current accounting regime and it directed the Board of Management to ask shareholders at this meeting to produce a solution for handling it.
Bank leaders committed to handling these problems from 2016 to 2018.
New Board of Management and Independent Supervision Team
Eximbank has formed a new Board of Management with eight members and one independent member for the 2015-2020 period.
The eight members include Mr. Cao Xuan Ninh, Mr. Le Van Quyet, Mr. Ngo Thanh Tung, Mr. Dang Anh Mai, Mr. Nguyen Quang Thong, Mr. Hoang Tuan Khai, Mr. Naoki Nishizawa, and Mr. Yasuhiro Saitoh. Mr. Quyet and Mr. Anh were nominated by the Board of Management.
Mr. Le Minh Quoc was nominated by the Board of Management as the independent member of the board.
The Supervisory Board includes Mr. Tran Le Quyet, Ms. Pham Thi Mai Phuong, Ms. Tran Ngoc Dung, Mr. Trinh Bao Quoc, and Mr. Dang Huu Tien.