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Banking & Finance

SBS: M&A the top priority

Released at: 17:37, 17/04/2015

SBS: M&A the top priority

Merger the only way to save securities brokerage, AGM told.

by Hung Nguyen

The Sacombank Securities Joint Stock Company (SBS) held its annual general meeting (AGM) on April 16 with the agenda headed by its merger with another brokerage firm to address its cumulative losses.

Mr. Phan Quoc Huyng, Vice Chairman and General Director of SBS, said that despite the company being out of the “special supervision” list of weak financial institutions it could still not get back on track due to its cumulative losses being higher than its charter capital.

When Circular No. 210 officially takes effect, closing brokerage firms with cumulative losses higher than 50 per cent of their charter capital, SBS must find a way of avoid such a fate, and the merger with another securities firm is the only possible solution.

In 2015 the company set a revenue target of VND40-50 billion ($1.85 - $2.31 billion) and profit of VND10 billion ($462,900). Mr. Huynh said the revenue target was the same as for 2014 due to limitations in working capital and the extent of its losses. He believes the securities market will still face difficulties in 2015 because of the likelihood of further declines in the oil price, an absence of support policies, and a lack of awareness among investors that the stock market is an important channel for mobilizing capital.

Since Circular No. 36 took effect the trading volume in the stock market has shrunk by two-thirds. If trading was to return to VND3 trillion ($138.87 million) per session it would bring SBS’s profits from broking activities to VND6 billion ($277,740) a month.

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