EVFTA opens new era in Vietnam-EU trade ties: Italian experts
The factory of the Far Eastern New Apparel Vietnam company in Bac Dong Phu Industrial Park, Binh Phuoc province
The EU-Vietnam Free Trade Agreement (EVFTA) is hoped to usher in a new period in promoting cooperation and mutual economic development between the two sides as it comes into effect in mid-2019, according to Italian experts.
In a recent interview granted to Vietnam News Agency’s correspondent in Italy, Vietnam’s Honorary Consul in Turin Sandra Scagliotti and Chairman of the Italy-Vietnam Chamber of Commerce Fulvio Albano stressed that the new-generation agreement may mark the beginning of a new era in trade relations between Vietnam and the EU.
Negotiations and the legal review have been completed for both the free trade agreement and the one on investment protection. The EVFTA process is now awaiting the Council of Europe and the European Parliament to sign and ratify it.
The agreement will bring great advantages to both Vietnamese and EU investors, including Italy, they noted, adding that the EVFTA is said to be a win-win agreement for both parties, creating a resoundingly positive effect for businesses and their long-term investment plans.
Recently, many workshops have been held in European countries to inform those interested of the great potential of the EVFTA, as well as to pressure the European Parliament into promptly ratifying the trade pact.
In Italy since November 2018, the Centre for Vietnam Studies in Turin has prepared a series of workshops to affirm the significance of this agreement in facilitating exchange and cooperation between Vietnam and European countries by simplifying customs procedures for certain products, recognising geographical indications, and applying environmental protection standards.
Europe should not underestimate the fact that Vietnam is an important economy in Southeast Asia, the experts said, noting that thanks to its political stability and open-door policies to attract investment, Vietnam has risen on World Bank’s business rankings.
The urbanisation rate in Vietnam is increasing rapidly, with the number of people in cities in 2015 accounting for 34 percent of the total population, giving an indication of the great potential of the Vietnamese market.
According to the experts, made-in-Italy brands are more and more popular in Vietnam with its current trend of modernisation and great demand for building infrastructure, in which Italy holds strength. Several fields in Vietnam are also attracting the attention of Italian companies.
Regarding opportunities for Italian enterprises in the EVFTA, Fulvio Albano stated that Italy was one of the first European countries to establish diplomatic relations with Vietnam and has always been one of its main partners through the friendship and open dialogue between the two countries.
In recent years, the bilateral relations have been continuously promoted. With the elimination of 99 percent of tariffs on exchange of goods between the two sides, the trade pact will facilitate and open a level playing field for European companies specialising in export and investment.
He said Italian firms need to act quickly to seize opportunities brought by the agreement, adding that they should make themselves known in Vietnam as soon as possible and promote their products on this new market.
Italy’s main exports – such as machinery, equipment, leather products, pharmaceutical chemicals, textiles, and food – can benefit greatly from the agreement. Moreover, big Italian companies are gradually increasing their initial investments in Vietnam and coming to recognise the country as their production centre.
President of the European Commission Jean-Claude Juncker remarked that trade and investment agreements with Vietnam are creating a model for Europe’s trade policy, and helping to further strengthen the Italy-Vietnam bilateral relations.
Once the EVFTA agreement goes into effect, the EU will eliminate import duties on approximately 85.6 percent of its tariffs lines on Vietnamese products. After seven years, 99 percent of EU tariffs will be removed for Vietnamese products. Vietnamese textiles, footwear, and seafood products (except for canned tuna and fish balls) will incur no import duties within seven years after the agreement takes effect.
Vietnam will eliminate 65 percent of its import duties on EU items and has drawn up a roadmap to eliminate tariffs by over 99 percent over the next decade. The remaining export items will be offered tariff quotas with an import duty of 0 percent.
Vietnam, India highlight cooperation opportunities in pharmaceuticals
Indian Consul General in Ho Chi Minh City K. Srikar Reddy
There are a lot of potential for boosting cooperation, trade and investment in pharmaceuticals and health care between Vietnam and India, said experts at the Indian Pharma Exhibition and B2B meeting held in Ho Chi Minh City on January 21.
K. Srikar Reddy, Consul General of India in HCM City, said Vietnam is an important market for India’s herbal products and medicine, while highlighting India’s pharmaceuticals development.
According to Reddy, Vietnam is among rapid and dynamic economies in Asia with increasing per-capital income along with high demand on health care services.
In addition, the country is an attractive destination for foreign tourists as well as for medical tourism. Vietnam welcomed 15.49 million foreign visitors in 2018, a year-on-year rise of 19.9 percent. The number of health care centres is increasing to serve the growing foreign visitors.
India ranks third and 14th in the world in terms of pharmaceutical output and value, respectively, Reddy said, adding leading Indian pharmaceutical firms had international recognition from the US, the EU and Australia.
Besides, made-in-India medical equipment is shipped to 150 countries around the world, including Vietnam.
Vo Tan Thanh, Director of the Vietnam Chamber of Commerce and Industry’s HCM City chapter, stressed the development of Vietnam’s pharmaceuticals sector in recent years. However, production only meets 52 percent of domestic consumption. In 2018, Vietnam imported 3 billion USD worth of pharmaceuticals.
Vietnamese pharmaceutical firms want to cooperate and call for investment from foreign companies, including those from India to attract capital, technology and high quality human resources. Therefore, there is room for cooperation between Vietnamese and Indian businesses in the field, according to Thanh.
Ramesh Anand, Chairman of the Indian Business Association in Vietnam, said Indian enterprises are interested in investing in and doing business with Vietnam because this is a promising market and a gateway to access the Southeast Asian region.
By the end of 2018, India had invested in 209 projects worth 878.5 million USD in Vietnam, ranking 29th among 129 foreign investors in the Southeast Asian nation.
In the pharmaceutical and medical equipment sector, India regards Vietnam as an important and promising market. So, Indian enterprises are seeking investment opportunities in building plants in Vietnam along with promoting trade of made-in-India pharmaceutical products, Anand said.
Besides, India with its advantage on pharmaceutical production and research can assist Vietnam in technique and transfer of vaccine production technology, medical equipment, and pharmaceutical materials, thereby facilitating the Vietnamese sector’s further development in the future.
Malaysia ranks 12th among Vietnam’s foreign investors in 2018
Malaysia ranked 12th among countries and territories investing in Vietnam in 2018 with total registered capital hitting 435.54 million USD, according to the Vietnamese trade office in Malaysia.
The country pumped 254.76 million USD into 41 new investment projects in Vietnam from the start of 2018 to December 20, while its investors added 27.47 million USD in total to their capital at 13 operating projects.
Malaysian investors also spent 153.31 million USD buying shares in Vietnamese companies.
Malaysia’s accumulated investment in Vietnam as of December 20, 2018, reached nearly 12.48 billion USD in 586 projects, ranking 8th among 129 economies investing in the country.
Two-way trade value of Vietnam and Malaysia in 2018 expanded more than 14 percent on a yearly basis to nearly 11.5 billion USD.
Of the volume, Vietnam’s imports from Malaysia were worth nearly 7.45 billion USD, up more than 27 percent from 2017, while exports dropped to around 4.05 billion USD. As such, Vietnam ran a trade deficit of 3.4 billion USD with Malaysia in the year.
Major imports include petrol and oil, computers, electronics goods and parts, which reached over 1 billion USD.
Meanwhile, some export lines declined in the year, as computer, electronics products and parts from Vietnam experienced a sharp drop of more than 32 percent.
Vietnamese firms advised to tap opportunities in Japanese market
There are many opportunities for Vietnamese enterprises to sell their goods in Japan, according to Yuichiro Shiotani, director general of Aeon Top Value Viet Nam.
Shiotani said Japanese consumers are realistic, and will buy quality goods that suit their taste, regardless of their origins.
Currently, not only big companies in Vietnam, like confectionery manufacturer Bibica and dairy maker Vinamilk, but also small- and medium-sized firms are looking to Japan to expand their exports.
Phuong Dung, vice director of the Ho Chi Minh City-based Herbal Nutrition Care ATD, told Sai Gon Giai phong newspaper that her company is looking for consultants on procedures for export to Japan.
Hafabo, a manufacturer of herbal hair and skin care product in Long An, said it is seeking way into AEON Vietnam’s shopping malls and even further in AEON Japan’s.
Japan is now the biggest export market of Vietnam behind the US and China. It has big tremendous demand for agricultural products, which are among export staples of Vietnam.
Nguyen Thi Hong Minh, Chairwoman of the Association for Food Transparency, said to enter a potential market like Japan, it is important for Vietnamese businesses to build trust on quality, first of all meeting food safety standards.
Statistics from the Vietnamese Ministry of Industry and Trade, as of early October 2018, Vietnam’s total export value to Japan reached 13.82 billion USD, up 12.2 percent over the same period of 2017.
Japan is also one of the four markets to which Vietnam’s export turnover exceeded the 10 billion USD benchmark.
Tourism and infrastructure upgrades fuel Quang Ninh property market
Quang Ninh, a tourism hub in northern Vietnam, is forecast to increase growth in its real estate market thanks to a combination of a thriving tourism scene and infrastructure upgrades, a Savills expert told VOV Online.
Van Don International Airport and surrounding infrastructure projects are expected to add fresh impetus to Quang Ninh’s real estate growth.
Nguyen Hong Son, head of the consultancy services division from real estate service provider Savills Vietnam’s Hanoi branch, said that Quang Ninh’s real estate market is divided into three key areas. They include Ha Long city, Van Don district, and several newly-emerging areas such as Mao Khe townlet and the provincially-governed cities of Uong Bi and Mong Cai.
Ha Long city and Bai Chay ward have been attracting major interest from domestic leading real estate firms, including Sun Group, Vingroup, BIM group, and FLC Group.
These areas have also gained attention from foreign investors such as Dubai-based property developer Nakheel. 2018 saw the areas enjoy strong growth buoyed by increased tourism and significant infrastructure improvements. This followed steady growth seen in previous years.
Furthermore, Van Don emerged as the most promising investment destination during 2018. Recent infrastructure upgrades, most notably the inauguration of Van Don International Airport, have triggered a fresh wave of real estate investment in the district.
A number of other promising developments are also mooted for the district. Quang Ninh has even set a target of turning Van Don into the province’s financial, tourism, and cultural centre by 2030. This is in addition to the district’s projected growth into a special economic and administrative zone in the future.
In the real estate market, shophouses are increasingly in demand and Quang Ninh is not an exception to the trend.
A large number of real estate projects ranging from housing, urban areas, to commercial tourism categories cover shophouse products.
These projects are located in areas expected to benefit from tourism growth and additional trading activities. Quang Ninh’s tourism sector has experienced robust growth in recent years. Indeed, last year the province served over 12.5 million tourists.
Ha Long Ocean Park in Bai Chay ward, the tourism port of Tuan Chau island, and other tourist attractions located near Van Don International Airport are expected to leverage the upcoming growth of the shophouse sector.
Quang Ninh’s real estate market is expected to remain growing in 2019, but each area and sector will grow at different rates, Son from Savills noted.
The housing sector will remain steady, centred on local residents and investors, while properties in relation to tourism are forecast to attain strong growth amid increasing tourism activities and diversified tourism products. As a result, hotels and apartments for rent will be the biggest benefactors.
The supply of tourism properties in Ha Long remains large. Though the city has recently seen impressive tourism growth, there is no guarantee that all the projects will be successful. The successful implementation of projects depends on the capacity of investors, relevant risks, and the possible added value these projects could bring about.
Differentiation is needed to create different values among various projects, thus standing out from customers and developers.
Investors also need to focus on improving the quality of their projects, instead of eyeing quantity and the value that could be earned from operating the projects, the Savills expert suggested.
Vietnam to remain a fast growing Asian economy
With a 2019 GDP growth of 6.9 percent, Vietnam will remain one of the fastest growing economies in Asia.
“We remain positive on Vietnam’s medium-term growth on strong manufacturing activity as FDI inflows to electronics manufacturing remain strong,” says economist Chidu Narayanan of Standard Chartered Bank.
According to a report recently issued by the bank, the country is likely to reach GDP growth of 6.9 percent this year.
The manufacturing sector has expanded by double digits for most of the past four years and this pace is likely to continue in 2019, says the report.
The bank expects manufacturing growth to remain strong this year, though mildly lower than in 2018. Strong FDI inflows to manufacturing will likely support robust manufacturing output, it says.
Standard Chartered economists also forecast FDI disbursement to stay at $15 billion this year and FDI inflows to the manufacturing sector, particularly electronics manufacturing, to remain high in the medium term.
FDI disbursement in Vietnam reached a record $19.1 billion in 2018, a year-on-year increase of 9.1 percent, according to the Ministry of Planning and Investment.
“Most macro-economic indicators improved in 2018, interest and foreign exchange rates were kept stable despite the Fed’s hike in interest rates and U.S.-China tension, and non-performing loans were well-managed below three percent,” says Nirukt Sapru, CEO Vietnam and ASEAN and South Asia Cluster Markets.
“We believe that the Vietnamese economy will remain one of the fastest growing in Asia and likely the fastest-growing ASEAN economy in 2019.”
The World Bank forecast that Vietnam’s GDP is likely to drop to 6.6 percent in 2019 and 6.5 percent in 2020. Meanwhile, the Asian Development Bank (ADB) estimates the country’s GDP for 2019 at 6.8 percent.
Vietnam’s GDP growth of 7.08 percent in 2018 was the highest in a decade, according to the General Statistics Office.
Technology advances bring opportunities for SMEs in e-commerce
Technology advances bring great opportunities to small- and medium-sized enterprises (SMEs) in the Asia-Pacific region once obstacles are resolved.
In the framework of the Asia-Pacific Economic Co-operation (APEC), the Vietnamese Ministry of Industry and Trade in combination with the APEC Secretary Board held the two-day “APEC Workshop on Harnessing Digital Trade for SMEs” with the aim of implementing one of Vietnam’s important initiatives on facilitating cross-border e-commerce.
Addressing the workshop, Lai Viet Anh, deputy director general of Vietnam e-Commerce and Digital Economy Agency under the Ministry of Industry and Trade, said: “Dramatic technology advances have created and enabled new lifestyles and forms of business in every corner of the world. Digitalisation and new technologies have significantly changed how and what we trade.”
Tra fish exports aim to rake in US$2.4 billion in 2019
The export value of Tra fish is projected to hit US$2.4 billion during 2019 with tra fish farming area reaching 5.5 million hectares, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
VASEP stated that the export of tra fish exceed US$2.1 billion last year as the US surpassed China to become Vietnam’s largest tra fish importer with an export value hitting more than US$525 million, up 57.7 per cent.
China was the second largest export market for Vietnamese tra fish with an annual turnover of over US$505 million (up 28.9 per cent), followed by the EU with US$231 million (up 19.1 per cent), and ASEAN with over US$194 million (up 43.1 per cent).
This year, the fisheries sector, particularly the tra fish industry, is forecast to face both advantages and disadvantages from a higher demand for tra fish throughout the global economy.
The impending Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement, is expected to add fresh impetus to the access of Vietnamese goods to foreign markets.
In addition, the unpredictable developments of the China-US trade war will present opportunities but also pose challenges for the nation’s exports.
To overcome difficulties and fulfill set targets, VASEP’s major focus will be on producing high quality tra fish, expanding its network of export markets, promoting sustainable development, playing an active role in international integration, and speeding up administrative reforms.
In addition, the association will follow strict regulations regarding the rules of origin and resolve the EU’s ‘yellow card’ warning for illegal, unreported, and unregulated fishing whilst tightening control over seafood products in accordance with international practices.
Vietnam becomes more attractive to Japanese enterprises
At an electronics firm of Japan in Vietnam (Source: sggp.org.vn)
With a young population, great potential and increasing trade growth, Vietnam is offering big opportunities for Japanese firms to expand their market, according to the Japan External Trade Organisation (JETRO).
In fact, many Japanese enterprises have invested or expanded investment activities in Vietnam, focusing on the fields of food processing, agro-forestry-aquaculture, consumer goods, electronic components, industrial products, construction, transport and environmental protection.
Not only big firms, small and medium-sized enterprises are also increasing their investments in international markets.
JETRO has provided Japanese firms with advertisement costs and market information, and helped them to connect with Vietnamese investors, thus making it easier for them to operate in Vietnam.
At present, as many as 70 percent of Japanese enterprises operating in Vietnam have committed to expanding their investment, production and business in the country in the coming time. This proved that Vietnam continues to be an important destination for Japanese firms.
JETRO Chief Representative in Ho Chi Minh City Takimoto Koji said the Vietnamese government and Japanese enterprises should pay attention to training high-quality human resources, who can control robots.
Priority should be also given to developing energy and infrastructure, especially transport infrastructure, he said.
Vo Tan Thanh, Director of the Vietnam Chamber of Commerce and Industry’s Branch in HCM City, said Vietnam is accelerating reformd to attract investment, and supporting investors in all fields, especially in handling administrative procedures and reducing taxes.
The Vietnamese government has devised many solutions to improve the country’s investment and business environment in a bird to lure more foreign investors, especially those from Japan, he said.
To cooperate sustainably with Japanese partners, Vietnamese firms need to invest more in science and technology to better the quality of their products and make their production more professional, Thanh suggested.
They should also boost linkages to meet the demand for materials from Japanese businesses, he stressed.
Economic and trade relations between Vietnam and Japan have recorded rapid development in recent years. Japan is now the fourth largest trade partner of Vietnam after China, the US and the Republic of Korea. The two countries strive to lift their trade turnover to 60 billion USD by 2020.
By the end of 2018, Japan topped the list of foreign investors in Vietnam with combined registered capital of 9.5 billion USD. Around 1,800 Japanese enterprises are operating in the Southeast Asian country, some 1,000 of which are in Ho Chi Minh City.
Digiworld profit gains 1.5 times in 2018
Digital retailer Digiworld JSC has announced its total revenue rose 56 per cent year on year in 2018 to VND5.94 trillion (US$255.5 million).
Of the figure, sales of laptops and tablets contributed VND2.4 trillion, up 6 per cent year on year, and cellphone sales reached VND2.35 trillion, up 213 per cent year on year.
Sales of office equipment and home appliances reached VND1.11 trillion and VND75 billion.
The company reported its post-tax profit gained 39 per cent year on year to VND109 billion.
The company beat its full-year revenue and profit forecasts by 25 per cent and 8 per cent.
Revenue and post-tax profits for the fourth quarter of 2018 were VND1.56 trillion and VND31.7 billion. Both figures increased by 43 per cent year on year.
In 2019, Digiworld is targeting VND7.15 trillion in revenue, up 20 per cent from 2018, and VND137 billion in post-tax profit, up 25 per cent.
VCSC raised VNĐ800 billion bonds
Viet Capital Securities Corporation (VCSC) has reportedly raised VND800 billion (US$34.4 million) via corporate bond issues.
The firm’s corporate bonds are unconvertible with the par value of VND10 million and maturity term of 24 months.
Domestic investors bought VND621.4 billion worth of VCSC bonds while foreign investors bought VND178.6 billion.
Most domestic bondholders were individuals with total purchasing value of VND617.4 billion. Only four domestic institutional investors joined the race, buying VND4 billion.
The VCSC has listed nearly 163 million shares on the Ho Chi Minh Stock Exchange, and fell 1 per cent to end Friday at VND39,000 ($1.68).
Rubber stocks rise on global prices
The global rubber price has increased sharply in recent weeks, benefiting the share prices of Vietnamese producers on the stock market.
According to Bloomberg, the rubber price on the Tokyo Commodity Exchange (TOCOM) rose 0.8 per cent on Friday to finish last week at 186.20 yen (US$1.7) per kilogramme.
The TOCOM rubber price has gained by 9.4 per cent since the end of 2018 and by nearly 22 per cent since its six-month low of 152.9 yen per kilogramme on November 21, 2018.
According to several organisations, growing demand in 2019 is set to push rubber prices higher.
According to the Association of Natural Rubber Producing Countries (ANRPC), the total global production of natural rubber will rise 5.8 per cent year on year to reach 14.69 million tonnes in 2019 and total consumption is forecast to rise by 3.6 per cent year on year to 14.73 million tonnes.
The price of natural rubber on global markets will be affected by crude oil prices with expectations that higher crude oil prices will boost natural rubber prices.
On Friday, Brent crude rose 2.5 per cent to end last week at $62.70 a barrel, having increased by nearly a quarter since December 24, 2018.
On the Vietnamese stock market, natural rubber companies have seen their stocks increase significantly in the first three weeks of the year thanks to positive trading of rubber on global markets.
Since Christmas, shares of the Southern Rubber Industries Group (HoSE: CSM) have gained as much as 4.7 per cent.
In the same time, Da Nang Rubber JSC shares (HoSE: DRC) have increased by 11.5 per cent and Sao Vang Rubber JSC shares (HoSE: SRC) have shot up 36.3 per cent.
Other rubber companies have also enjoyed strong price rises, such as Tay Ninh Rubber JSC (10.5 per cent) and Dong Phu Rubber JSC (9.5 per cent).
According to Vietnamese agencies, the country witnessed an increase in its total export volume but export value fell.
General Customs Department of Viet Nam recently reported the country’s rubber exports in December 2018 fell 3.8 per cent in volume and 5.8 per cent in value on a monthly basis to 172,800 tonnes and $210.52 million.
The figures were up 2.5 per cent in volume and down 13.6 per cent in value compared to 2017.
Total rubber export volume in 2018 reached 1.56 million tonnes, worth $2.09 billion. The figures were up 13.3 per cent year on year in volume and down 7 per cent in value.
Exports to China gained 16.4 per cent year on year in volume but dropped 5 per cent in value, reaching 1.04 million tonnes and $1.37 billion.
Viet Nam’s rubber exports to India jumped 85.6 per cent year on year in volume and 60.5 per cent in value to 102,900 tonnes, worth $145.4 million.
The average export price of Vietnamese rubber products was $1,218 per tonne in December 2018, down 2.1 per cent monthly and 15.7 per cent yearly.
VIB’s pre-tax profit skyrockets in 2018
Last year, VIB surpassed many big joint stock banks in terms of retail lending.
Vietnam International Bank (VIB)’s pre-tax profit recorded a significant yearly growth of 95 per cent to more than VND2.74 trillion (US$118 million) in 2018, the bank announced on Thursday.
The pre-tax profit was also 37 per cent higher than the target for the year, VIB said, adding that 2018 was the second consecutive year its profits saw a year-on-year rise of nearly 100 per cent.
The bank’s revenue increased by 48 per cent over the previous year, in which interest income and non-interest income grew by 40 and 92 per cent, respectively.
The bank’s cost to income ratio (CIR) reached 44 per cent last year, 13 per cent lower than in 2017, while its return on asset (ROE) rose to 22.5 per cent, making VIB one of the banks with the highest ROE.
According to VIB, retail banking business remained important with revenue growing by 90 per cent. Its wholesale banking and treasury banking businesses also gained profit hikes of 22 and 49 per cent, respectively.
As of December 31, 2018, VIB’s total assets topped nearly VND140 trillion ($6 billion). The bank’s lending balance reached VND98.93 trillion, up 17.5 per cent year-on-year. Its retail lending balance witnessed a remarkable rise of 48 per cent to VND74.3 trillion.
“Thanks to this impressive growth rate, VIB surpassed many big joint stock banks in terms of retail lending and affirmed its position as one of the joint stock banks with high retail lending market share,” the bank said in a statement.
Late last year, VIB received approval from the State Bank of Viet Nam (SBV) to apply a capital adequacy ratio following Basel II standards.
Basel II is the second edition of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on banking supervision.
Basel II comprises minimum capital requirements, supervisory reviews and market discipline. It aims to enhance competition and transparency in the banking system and make banks more resistant to market changes.
VIB’s capital adequacy ratio (CAR) under Basel II was 10.2 per cent in 2018, the bank said.
VPBank posts $396.4 million pre-tax profit
Staff at VPBank. The bank took fourth position among the most profitable banks following Vietcombank, Techcombank and BIDV.
Viet Nam Prosperity Joint Stock Bank (VPBank) posted a pre-tax integrated profit of VND9.2 trillion (US$396.4 million) in 2018, representing a 13 per cent year-on-year increase.
VPBank last year earned a total consolidated income of more than VND31 trillion, increasing 24.2 per cent from the previous year. With the results, the bank continued to affirm its role as one of the most effective credit institutions. It took fourth position among the most profitable banks, following Vietcombank, Techcombank and BIDV.
The State Bank of Viet Nam in 2018 maintained its policy of stabilising the macroeconomy and ensuring safety of lending activities. It therefore continued to set a credit growth quota for banks.
VPBank was approved a quota of 17 per cent and its subsidiary – FE Credit of 20 per cent, lower than its set targets, thus partly affecting its profit.
The bank’s operational efficiency remained at a very high level in terms of total assets and equity. By the end of 2018, total consolidated assets were VND323.3 trillion (up 16.4 per cent), equity of VND34.7 trillion, outstanding loans reached VND230.3 trillion (up 17.1 per cent), and capital mobilisation of over VND219.5 trillion (up nearly 10 per cent). Return on assets (ROA) and return on equity (ROE) were 2.5 per cent and 22.9 per cent, respectively. Net interest income ratio (NIM) continued to be kept at the highest level of 9 per cent in the market.
Meanwhile, the Cost Income Ratio (CIR) continued to improve at 34.2 per cent, in comparison with 35.5 per cent of 2017.
The bank’s individual profit (excluding its subsidiaries’ profit) reached approximately VND5.1 trillion, an increase of over 31 per cent compared to the previous year and accounted for more than 55 per cent of the bank’s consolidated profit. Total operating income of the bank also achieved a high growth rate of 29 per cent compared to 2017, reaching more than VND17.7 trillion.
The majority of the bank’s revenue came from interest rates through lending to its strategic segments such as consumption finance, individual customers, household businesses, and small-and-medium sized enterprises. Income from fees also contributed to the bank’s results last year as total fee income reached more than VND3.8 trillion, up 19 per cent from previous year.
The results were thanks to promoting insurance, credit cards and digital banking services. The increased fee income also meant that the bank’s dependence on traditional lending products has been reduced and it has diversified its services.
VPBank said it submitted an application to the central bank to apply Basel II standards in 2019. So far, there have been three banks recognised as conforming to Basel II before the deadline including Vietcombank, VIB and OCB.
It has been one of the banks regularly announcing financial reports under International Financial Reporting Standards (IFRS).
The bank last year increased its investment in digital banking and the individual customer segment. It launched an innovative digital bank for the young generation named “YOLO” and $NAP of FE Credit. YOLO is expected to create the first digital banking ecosystem in Viet Nam while $NAP brings an automatic lending process. Together with other digitalisation services, YOLO and $NAP are expected to provide new growth momentum for VPBank in the future.
Work starts on $150m solar plant in Tra Vinh
Delegates attend the plant’s ground-breaking ceremony on Saturday. — Photo tienphong.vn
The construction of a solar power plant, valued at VND3.55 trillion (more than US$150 million), began in Duyen Hai Township in the Mekong Delta province of Tra Vinh on Saturday.
Financed by Trung Nam Tra Vinh Solar Power JSC, the 171ha plant has designed capacity of 165MWp. It is expected to become operational in the second quarter of 2019 and contribute more than 250 million kWh of electricity to the national grid annually.
The construction of the plant not only helps cut greenhouse gas emissions, but also generates jobs for more than 1,500 workers and contributes to development and social welfare in the region, said Do Van Kien, general director of Trung Nam Tra Vinh Solar Power JSC.
In a speech at the plant’s ground-breaking ceremony, vice chairman of the provincial People’s Committee Tran Anh Dung said the project is part of a renewal energy development plan.
He asked Trung Nam Tra Vinh Solar Power JSC to quickly complete procedures, focus resources on the construction, strictly follow environment standards and not negatively impact on locals’ lives.
Local authorities would create favourable conditions for the investor to ensure the project is implemented on schedule, Dung said.
According to experts, Viet Nam has extensive resources to develop solar energy with technical potential estimated at 300 Gigawatts (GW). The Government has set ambitious targets to install 12GW of solar power by 2030.
First US-style five-star resort opens in Phu Quoc
CEO Group on Sunday inaugurated its Best Western Premier Sonasea Phu Quoc resort in the southern province of Kien Giang.
Located in Phu Quoc Island’s Duong To Commune, the resort has an area of more than 34,800sq.m with total investment of VND1.5 trillion (US$64.6 million). The resort is the area’s first US-style five-star resort managed by Best Western Group.
The resort has 549 apartments and 16 high-end sea view villas.
CEO Group is one of the three biggest investors in Phu Quoc and runs the Novotel Phu Quoc Resort and Novotel Villas.
Speaking at the ceremony, Mai Anh Nhin, vice chairman of Kien Giang People’s Committee, said the project would help ease the shortage of five-star hotel rooms in Phu Quoc.
Olivier Berrivin, a representative of Best Western in Asia-Pacific region, said the project is one of the largest scale for Best Western Group in Viẹt Nam.
Tràn Dạo Dúc, deputy general director of CEO Group, said the project showed their commitment to turning Phú Quóc into an international tourism centre. It was also a step to develop a five star resort chain of 3,000 to 5,000 rooms nationwide by 2021.
New Vingroup centre opens in Hai Phong
The conglomerate Vingroup inaugurated its newest trade centre and hotel complex in the northern port city of Hai Phong on Saturday.
Located at the Vinhomes Imperia Hai Phong urban area, the 45-storey complex is the highest of its kind in the northeast region.
The five-star Vinpearl Hotel Imperia Hai Phong can provide 362 rooms while the Vincom Plaza comprises a shopping area with famous brands, CGV cinemas and a play zone covering 1,000sq.m.
Addressing the inauguration ceremony, municipal People’s Committee chairman Nguyen Van Tung praised Vingroup’s efforts to complete the complex in a timely manner.
Thanks to sufficient transport infrastructure, Hai Phong has become an ideal destination for investors, Tung said, adding that local authorities would continue to facilitate domestic and overseas businesses investing in the locality.
Vingroup Deputy Chairman Nguyen Viet Quang described the complex’s inauguration as a good beginning for the year, marking the launch of the 32nd Vinpearl brand and the 66th Vincom trade centre nationwide.
Vingroup hopes to have 200 Vincom commercial centres by 2021, affirming its top position in the domestic retail real estate market.
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