Online forum aims to boost exports

VietNamNet Bridge – Industry and trade officials and enterprises met on July 8 in an online conference between Ha Noi, Da Nang and HCM City to discuss ways to boost exports and industrial values over the next five months.

Industry growth was expected to reach 10 per cent, while export growth was expected to hit 3 per cent.

The sector must try harder to gain better results, said Bui Xuan Khu, deputy minister of Industry and Trade.

Khu said that although the National Assembly had reduced targets for industrial products and exports, the sector still needed a push in the right direction.

Industry growth was expected to reach 10 per cent, while export growth was expected to hit 3 per cent. But according to ministry data, the industrial production values and exports of the country had fallen, including a decrease of 11.7 per cent against the same term last year for industrial value and a decrease of 10.13 percent for export turnover, which had reached only VND27.6 trillion (US$1.5 billion) in the first six months.

Khu asked relevant authorities to try to ease difficulties for enterprises so that they could boost production. He asked the Electricity of Viet Nam to boost their management and operate their grids effectively to better serve families and local demands. He also asked the Viet Nam Garment and Textile Group to boost its exports and expand the domestic market, giving priority to low-income clients.

The ministry would co-operate win relevant enterprises and localities to help increase exports of rice, fisheries and other agriculture products to give more jobs to farmers.

They would focus on the Japanese market, which had a lower import tax for farming products for Viet Nam, as well as find new markets for rice, coffee and mechanical products in Africa and the Middle East, said Khu.

Khu asked domestic enterprises to build their own projects to get support from national trade promotion and to take advantage of the stimulus package.

The Ministry of Industry and Trade would work with the Ministry of Finance to change import and export taxes to increase exports and build the export credit insurance project.

Khu asked for more market studies to strengthen the domestic market and to sell more products to rural areas.

Le Quoc An, chairman of the Viet Nam Garment and Textile Association, asked the Government to better reform administrative procedures, especially to speed up customs procedures and to reduce electricity prices during peak times for the sector.

An also asked for the restructuring of the industry, under which they would build more factories with lots of workers. He asked for land to accommodate garment workers.

Huynh Minh Hue, deputy chairman of the Viet Nam Food Association, asked for better and more transparent policies on rice exports.

VietNamNet/Viet Nam News

Outstanding loans rise 17.5 pct in Vietnam

VietNamNet Bridge - Vietnamese banks’ total outstanding loans rose 17.53 percent in the six months ending June compared with a year earlier, the central bank said in a statement on its website Tuesday.

Credit in the banking system grew 17 percent during the period compared with the end of last year, the State Bank of Vietnam said. Total deposits gained 7.64 percent from a year earlier and rose 16.2 percent from the end of 2008, according to the statement.

State-owned commercial banks’ lending rates in Vietnamese dong ranged from 8.5 percent to 10.5 percent, while the borrowing costs of joint-stock commercial banks were between 10 percent and 10.5 percent, according to the statement. Interest rates on loans subsidized by the government were between 4.5 percent and 6 percent.

Interest rates of loans in US dollars ranged from 4 percent to 6 percent. The cost of credit card and consumer borrowings were between 12 percent and 16.5 percent, said the statement.

As of July 2, banks had lent VND372.3 trillion (US$21 billion) to businesses as part of the government’s loan-subsidy program, the central bank had said on its website late last week.

Banking figures

Saigon Thuong Tin Commercial Joint-Stock Bank, the third-largest company traded on the Ho Chi Minh Stock Exchange, had outstanding loans of VND47.6 trillion and total assets of around VND83 trillion by the end of June, it said in an e-mailed statement Tuesday. The lender did not mention comparable figures for the previous year.

Deposits at Sacombank, as the lender is known, reached VND70 trillion in the same period, and its bad debt ratio was 0.71 percent.

The Ho Chi Minh City-based bank reported pretax profits of VND905 billion ($51 million) for the first six months of the year.

Meanwhile, DongA Commercial Bank’s total outstanding loans reached VND27.4 trillion, up 23 percent from the same period last year, the lender said in an e-mailed statement Tuesday.

Total deposits at the HCMC-based lender were VND31.7 trillion, a yearon-year increase of 26.2 percent, according to the statement.

Its pretax profit totaled VND385 billion ($21.6 million) in the first six months, down 4.7 percent from a year earlier. Pretax profit in the January-to-June period made up 51 percent of the annual forecast, the statement said.

The bank had reported pretax profits of VND404 billion in the first six months last year.

An Binh Bank, an unlisted HCMCbased lender known as ABBank, said Tuesday credit grew to more than VND8.6 trillion ($483 million) in the first six months, 32 percent higher than six months ago.

Total deposits at the lender reached over VND11.6 trillion ($652 million), a 60 percent increase compared to December 31, 2008.

The bank reported first half pretax profits of more than VND172 billion ($9.6 million), 6 percent higher than its target.

With a 15 percent stake owned by Malaysia’s top lender Maybank, ABBank has forecast its pretax profits to rise to around VND400 billion ($22.4 million) in 2009.

The bank had reported a slump in gross profit last year to just VND70.2 billion ($3.9 million), well below the forecasted VND465 billion ($26 million), due to high operating costs and losses from trading foreign currencies and securities.

The lender plans to expand its network to nearly 100 branches across the country next year.

VietNamNet/TN

Banks’ big profits please banks but grieve businesses

VietNamNet Bridge – Commercial banks have gladly announced high profits for the first six months of the year. However, the banks’ joy has made businesses feel touched, since businesses have been promised by banks that they can share profit and success with banks.

Techcombank has announced profits of 1,031 billion dong ($60 million) for the first six months of 2009, which make it one of the most profitable joint stock banks. Military Bank announced profits of 720 billion dong, leaving it only 100 billion dong short of its target for the year.

"Our profit has dropped so dramatically since May. Some of that was due to fluctuating exchange rates, but still I feel sad. “Today (June 23), I need $30,000, and the bank told me that I must pay an additional 550 dong for each dollar, a so-called ‘foreign currency conversion fee.’ “This is the highest fee level so far. I can’t understand why I have to pay the 550 dong? Maybe my knowledge is not deep enough? Excerpt from a businessman’s letter to VNExpress

Ten other banks have also reported that they were well ‘in the black’ for the first half of 2009. Analysts still await reports from two big names in joint stock banks, Sacombank and ACB. A source from ACB said the bank’s first-half profits are estimated to reach 1,200 billion dong. Meanwhile, Sacombank’s profits are estimated at 900 billion dong.

The high profit announced by banks in these difficult times has caused businesses to feel sorry for themselves. The director of a business commented bitterly to a VNExpress reporter that “the banks all say they will share difficulties, profit and success with businesses. Meanwhile, while businesses have been struggling with crisis and many of are reporting losses, some are on the verge of bankruptcy, but banks still reap fat profits.”

Commercial banks themselves well understand what businesses think. Many are thus wary of publishing details about their profit. A senior manager of a joint stock bank told a reporter that though he was happy with his bank’s successs, he did not want the local press to report about it. One bank is rumored to have deliberately lowered its announced profit in 2008.

The director of an import company in HCM City sent a letter to VNExpress, confiding that he was compelled to purchase dollars from banks at prices two or three percent higher than the officially quoted prices. He said a lot of his friends, also businessmen, have met difficulties in purchasing foreign currencies. If the businesses did not agree to purchase foreign currency at the high prices, they would not have money to make payment for the foreign partners.

Bank reports show that core banking services, including the money exchange trading and lending have brought the biggest profit to banks. Traditional services made up 70 percent of Techcombank’s total profit, while the rest came from investments like bond or gold trading.

Loans still make up 50 percent of Techcombank’s total turnover, and 60 percent at Military Bank.

Commented about the banks’ high profit, Banking Academy Deputy Director To Kim Ngoc, said that banks almost never post a loss. Lately they have been profiting from the Government’s demand stimulus package. Trading in the interbank monetary market has also brought considerable profit to banks. More profit flows in from loans with high interest rates under contracts signed some time ago, or from bond trading.

“If banks can make fat profits while businesses have difficulties, it’s a reflection of the injustice in sharing profit in the society,” Ngoc said. However, she said, it is impossible to force banks to ‘sacrifice’ profit for businesses. Besides, banks must not be allowed to go bankrupt, because this will badly affect the whole banking system and the national economy.

Ngoc is not as optimistic as other experts about the business results banks will report in the second half of 2009. She noted that Vietnamese businesses have not yet felt all the follow-on shocks from the global economic crisis. Also, Vietnamese businesses and banks have been enjoying big support from the Government. Once the support is reduced, businesses may face bigger difficulties. The big loans banks are providing now could become a burden on them later, if businesses, unable to sell their products in shrinking export markets, cannot pay their debts to banks.

VietNamNet/VNE