250417Intellasia Finance Vietnam - hkbav.org ABB drives Vietnam power's digital era 15 PM: Tra Vinh

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Transcript of 250417Intellasia Finance Vietnam - hkbav.org ABB drives Vietnam power's digital era 15 PM: Tra Vinh

  • 25 April 2017

    finance & business news

    FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Reference exchange rate up 5 VND 1 The profit gap of domestic banks 2 Are banking stocks expensive or cheap? 3 BIDV plans to raise charter capital this year 4 Vietnam's top listed bank BIDV looking for steady profit in 2017 5 Vietnam's bank seeks $700 million via stake sale to

    foreign investor - report 5 More officials arrested for violations at DongA Bank 6 BIC among Top 100 Vietnam Excellent Brands in 2016 7 'The first time' of Eximbank after two years of turmoil 7 Ministry petitions to cut lending interest rate for pig breeders 8 Iran and Vietnam promote cooperation in multiple sectors 8 Japanese firms want Circular 23 modified 9 Taiwan, VN can go green together 9 Sharp rise in Q1 fertiliser imports 10 Vietnam struggles to deal with loss-making megaprojects 11 Call for $309 million to upgrade VN railways 11 Ministry drafts Decree on compulsory social insurance for

    foreign workers in VN 12 Workers to get better services: PM 13 HCM City to develop food industry 14 HCM City to relocate construction material facilities 15 ABB drives Vietnam power's digital era 15 PM: Tra Vinh expected to become new trading centre 17 Ban Gioc to become national tourism site 18 Association sees busier property market in Q2 19 Traditional markets need to be nurtured 19 Corporate profit falls 60pct in 2010-2015 20 Vietnamese firms reach deals with Burma partners 21 Local firms unprepared for climate change adaptation 21 FDI firms leading loss-making rate for years 22 Industry 4.0 a threat to textiles sector 22 Vietnamese pig farmers hard hit by imported meat 23 Private investors in infrastructure suffer disadvantages 24 Angel investors come together to support startups 24

    BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Business Briefs April 25, 2017 25 Stocks fall further on poor market sentiment 25 Lack of info to keep stocks quiet 26 Experts: Further stock losses likely this week 27 Agencies asked to publicise equitised SOEs not listed 28

    Price developments of defensive stocks get exciting in 2017 28 Viettel gets ready for April ipo in Tanzania 29 PV Power prepares for August IPO 30 Vietjet airline records positive business results in Q1, 2017 30 Vietnamese firms set for active mergers season 31 FPT Telecom's 2016 revenue at $290mn 32 Proposal to upgrade City airport mooted 32 Binh Duong starts operating second wastewater treatment

    plant 33 Hoi An starts $44.2 million tourism property project 33 Ca Mau gas processing plant to start commercial production

    in June 33 New technology ups rice value in Can Tho 34 Rent-A-Port leads in green foresight 35 IREX set to benefit from solar flare-up 36 HCM City transport authority comes up with new

    parking fee plan 37 HCM City to open more tourist streets 37 Vina Kraft's second paper plant becomes operational 38 Vietnam's Saigon Petro seeks diesel ahead of plant maintenance 38 Samsung enhances smartphone checks after last year's

    Note 7 fires 39 First industrial waste power generation plant inaugurated 39 Vietnamese airlines roll out new international flights 40 PAN Group reports positive performance 40 Following BKAV, Viettel aims to make luxury smartphone 41 Vietjet to offer a million promotional tickets 42 BIM Group - Syrena Vietnam receive Strong Vietnamese

    Brand award 42 Vietlott's distribution system through mobiles to be launched 43 CapitaLand partners with internationally Acclaimed Feng Shui

    consultant Dato' Joey Yap 43 2017 Vietnam Property Awards short list to be announced 44 Vietnamese Camau Bananas exported to Dubai 45 Ly Son islanders abandon lobster farming 45 'VND0 tours' for Chinese travellers: how to stop them 45 Beverages greatest contributor to FMCG growth 46 Businesses can still donate autos to State agencies - draft law 47 Dow works for environment protection on Earth Day 47 New GM for Eastin Grand Hotel Saigon 48

    FINANCE

    FINANCE Reference exchange rate up 5 VND

    25/APR/2017 INTELLASIA| VNA

    The daily reference exchange rate for VND/USD went up 5 VND on April 25 compared to the previous day to 22,344 VND per USD. With the current trading band of +/- 3 percent, the ceiling rate applied to commercial banks during the day is 22,993 VND and the floor rate 21,680 VND per USD. The opening hour rates at commercial banks saw strong rises from April 24, with Viet-

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    Vietnam finance & business 25 April 2017

    combank increasing both rates by 25 VND, listing the buying rate at 22,705 VND and selling rate at 22,775 VND per USD. The rates listed by BIDV were 22,700 VND (buying) and 22,770 VND (selling), both up 30 VND. Vietinbank maintained the selling rate unchanged from April 24 at 22,770 VND but added 5 VND to the buying rate, purchasing the greenback at 22,700 VND per USD. http://en.vietnamplus.vn/reference-exchange-rate-up-5-vnd/110758.vnp

    The profit gap of domestic banks

    25/APR/2017 INTELLASIA| STOCKBIZ

    In the same business environment and being impacted by the same macro situation, the profitability of foreign banks are much higher than domestic banks'. Beside the ad- vantage of cheap capital, caution in lending and sustainable revenue from service help foreign banks to get such the profit. Huge profit for foreign banks, big struggle for domestic banks In early April, 2017, HSBC Vietnam MTV Limited announced its financial statement for 2016. Accordingly, by the end of 2016, total assets of HSBC Vietnam reached over 71,138 billion VND, with a chartered capital of 7.528 billion VND. Profit before tax reached 1,801 billion VND, increasing by 46 percent, profit after tax reached 1.441 bil- lion VND. According to ANZ, total assets of the bank in 2016 reached 39 trillion dong, decreasing by 15 percent compared to at the beginning of the year. The bank's chartered capital was only 3,000 billion VND, equivalent to small-sized banks in Vietnam. However, ANZ Vietnam achieved profit after tax of 452 billion VND, folded by half in 2015. It can be seen that the profit of these banks mainly rely on service. Specifically, HSBC's net interest income for the year was VND2,396 billion, slightly higher than that of FY2015. Net interest income from its services reached 628 billion VND. Notably, gain from forex trading increased sharply by 66 percent to 754 billion VND. At the same time, HSBC's operating expenses decreased to VND 1,845 billion com- pared to last year. Credit risk provision dropped sharply by 70 percent to 61.5 billion VND. At ANZ, by the end of 2016, lending to customers reached VND14,100 billion, decreasing by 13.4 percent. Deposits of customers reached 32,600 billion, decreasing by 8 percent. Due to negative credit growth, ANZ's net interest income declined to 1,230 billion VND, de- creasing by 8 percent compared to 2015. As a result of improved earnings from forex trading, securities investment and service activities, ANZ's after tax profit increased by 50 percent compared to the 2015 result of 300 billion VND. Comparing domestic banks with the equivalent chartered capital with these two banks, it can be seen that foreign banks are profitable while Vietnamese banks, despite continuously recorded credit growth cannot keep up with foreign banks in profitabil- ity. In 2016, banks with chartered capital of over 3 trillion dong recorded relatively low profit. Profit before tax and after tax of NCB was VND16.5 billion and VND13.2 billion respectively. Saigonbank recorded net profit of 139.4 billion dong, KienLongBank's to- tal after tax profit in 2016 was 121 billion VND, decreasing by 27 percent compared to 2015. This is the 5th successive year that the profit has declined. In the banking group with chartered capital of VND5,000-7,000 billion, profit from trading activities ranged from nearly VND400 billion to less than VND1 trillion. Advantage of service development According to Dr Nguyen Tri Hieu, a financial expert, foreign banks in Vietnam have achieved better results than domestic banks for two reasons. Firstly, foreign banks are supported by capital from their parent banks and banks related to them abroad with cheaper capital, which contributes to high profits. Secondly, although the size of operations of foreign banks is small compared to other banks in Vietnam, the total assets of these banks account for only about 10-15 percent of the total assets of commercial banks, they do business very carefully and then avoid NPLs. Accordingly, the risk provision is also low, not corroding banks' profits like do- mestic banks and contributing to the increase of profits beside the cheaper cost of cap- ital. Dr Bui Quang Tin from the HCM City University of Banking says that in recent years, the structure of profit and turnover of foreign banks in Vietnam is different from the

    Intellasia 25 April 2017 2 / 48

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    Vietnam finance & business 25 April 2017

    structure of domestic banks. More than 70 percent of revenue contributes to domestic banks' earnings is from credit, some even with 85-90 percent. Credit in Vietnam is as- sociated with NPL, then provisioning for bad debt results in eroding profit. The re- maining result is not high. The business structure of foreign banks depends on services and revenue from servic- es accounts for more than 70 percent. When making money by service, the money is very sustainable, the revenue is made only with the exception of related expe