Financial Markets

Vietnam sees downward shifts in yield curve: ADBBy Thanh Thom Government bonds in Vietnam are largely held by commercial banks, which is reflective of their capacity to transact in larger volumes – PHOTO: TL HCMC – Local currency (LCY) government bond yields in Vietnam have dipped for all tenors between August 31 and October 15, resulting in a downward shift of the yield curve, the Asian Development Bank stated in its latest Asia Bond Monitor issue, released on November 20. The quarterly issue, titled “Emerging East Asian Local Currency Bond Markets: A Regional Update,” reported that Vietnam’s yields fell an average of 21 basis points (bps) for the two-year through 10-year maturities, while yields at the very short-end (one year) and the very long-end (15 years) of the curve shed nine bps and six bps, respectively. The spread between the two-year and 10-year maturities widened to 89 bps on October 15 from 82 bps on August 31. The decline in … [Read more...] about Vietnam sees downward shifts in yield curve: ADB

Banks rush to issue bondsThe Saigon Times Daily A bank teller counts Vietnamese banknotes. Many banks have issued a large amount of bonds to raise capital – PHOTO: THANH HOA HCMC - Many banks have registered lower growth in capital raising than that in credit, forcing them to issue bonds to deal with capital shortfalls during the rest of the year, reported Nguoi Lao Dong newspaper. This month and next, Bank for Investment and Development of Vietnam (BIDV) will sell 400,000 bonds to mobilize VND4 trillion (US$172 million), VND3 trillion from seven-year bonds and VND1 trillion from 10-year bonds. These bonds will be offered to both local and foreign individuals and organizations, excluding credit institutions and their subsidiaries, as well as branches of foreign banks. BIDV will use the capital raised from the bond sale for its operations, and from medium- and long-term loans for the construction, light and heavy industries and service sectors. The State Bank of Vietnam … [Read more...] about Banks rush to issue bonds

Agribank squashes bankruptcy rumorsThe Saigon Times Daily Clients transact at an Agribank office – PHOTO: AGRIBANK HCMC – Vietnam Bank for Agriculture and Rural Development (Agribank) said in a statement on November 11 that recent rumors about its bankruptcy in some localities are untrue. Agribank also confirmed that the insolvency of its finance leasing company ALC II does not affect the operations of the bank or its clients’ deposits. After the former general director of Vietnam Social Security (VSS), Le Bach Hong, was arrested on November 9, some news websites mentioned that Agribank guaranteed ACI II’s loans from VSS, and concluded that Agribank must be accountable for repaying debts on behalf of ALC II. Some false rumors then spread that Agribank has gone bankrupt. Consequently, a large number of workers at some industrial parks rushed to the bank’s offices to withdraw their money, according to the bank. The bank said that while … [Read more...] about Agribank squashes bankruptcy rumors

Banks report high bad debts despite handsome profitsThe Saigon Times Daily Customers are seen transacting at an office of Techcombank. Local banks reported high bad debts despite handsome profits last quarter - PHOTO: THANH HOA HCMC – Although many commercial banks achieved positive business results with high profits last quarter, bad debts increased sharply in the period, according to Lao Dong newspaper. Most banks have publicized their financial reports for quarter three. Accordingly, 21 out of 26 banks have reached 70% of their full-year targets, while giants in the banking system, such as Bank for Foreign Trade of Vietnam (Vietcombank), Bank for Investment and Development of Vietnam (BIDV) and Technological and Commercial Joint Stock Bank (Techcombank), have achieved 90% of their targets for the whole year. High profits reported Local banks posted a combined pretax profit of more than VND67 trillion (US$2.9 billion) in the quarter three, surging 41% year-on-year. … [Read more...] about Banks report high bad debts despite handsome profits

Banks struggle to mobilize capitalThe Saigon Times Daily A customer is seen transacting at an office of Techcombank. The bank is the first one to be allowed to increase its lending limit this year - PHOTO: THANH HOA HCMC - As many banks have almost reached the lending cap set for the whole year, they are now seeking ways to mobilize funds to meet the demand for loans among individual and corporate customers that tends to surge towards the end of the year, reported Thanh Nien newspaper. Late last month, Technological and Commercial Joint Stock Bank (Techcombank) was the first bank to be allowed to increase its credit growth limit from 14% to 20% this year. Thus, Techcombank may offer an additional VND10 trillion (US$430.2 million) this year. Meanwhile, many other banks have reached their maximum credit growth of 14%-15% since early this quarter. Bank for Foreign Trade of Vietnam (Vietcombank), for example, reached the lending cap set for the whole year of 15% in the … [Read more...] about Banks struggle to mobilize capital