Sacombank earns 5.842 trillion dong net interest income in 2011

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank-STB) has recently announced its consolidated fiscal statement for the fourth quarter of 2011 with a year on year increase of 14% in its core business or net interest income, reaching 1.665 trillion dong.
In the quarter, the lender gained over 165 billion dong profit from forex trading activities while in Q4 2010, it suffered a loss of over 745 billion dong from this segment.

STB incurred loss of 19 billion dong from securities trading activities and 8.3 billion dong from securities investment operations in the quarter (its loss was over 513 billion dong in Q4 2010).

In addition, the lender also posted over 227 billion dong loss from capital contribution and stake purchase although it gained over 500 billion dong profit from this segment in Q4 2010.

According to Sacombank’s fiscal statement explanation, its balance in securities trading operation by the end of 2011 was only 394.3 billion dong, down by 1.93 trillion dong, or 85% from the end of 2010.

Reasoning for this decline, Sacombank said that on June 13, 2011, it transferred its ownership model in Saigon Thuong Tin Securities Joint Stock Co (SBS) from a subsidiary to be an associated company. On November 11, 2011, STB continued to transfer its ownership model in SBS from an associated company to be a long term investment model. Therefore, its balance for securities trading activities and securities backup balance as of December 31, 2011 did not include the balance of SBS.

In Q4 2011, the bank spent only over four billion dong on its risk standby fund, down 97% year on year. Therefore, it’s after tax profit was over 471 billion dong, rising 28% from Q4 2010.

Accumulatively, in 2011, the bank earned over 5.842 trillion dong net interest income, rising 50% year on year and total loss from securities trading, investments, capital contribution and stake purchase was over 439 billion dong.

It’s after tax profit for the whole year was nearly 1.996 trillion dong, rising 4% on year. Of which, the profit of the holding bank was 2.066 trillion dong, fulfilling 103% of the year’s pre tax profit plan (2.7 trillion dong).

As of December 31, 2011, the bank posted total assets of 141.532 trillion dong, down 7% from early 2011, total deposits of customers at over 75.092 trillion dong, down 4% from early 2011 and total outstanding loans at over 80.539 trillion dong, down 2% from January 1, 2011.

Its bad debts ratio was 0.57% till the end of 2011.

Thus, Sacombank is the second bank after Hanoi Building Development Commercial Joint Stock Bank (Habubank) announcing negative credit growth in 2011. Meanwhile, Vietinbank, Vietcombank and Eximbank posted their credit growth in 2011 at 25.3%, 19% and 20% respectively.

In 2011, Sacombank bought back 100 million treasury shares. In addition, a series of majority shareholders offloaded capital from STB. Particularly, Dragon Capital divested 6.66% stake, ANZ trimmed 9.71% stake in STB for Eximbank and Refrigeration Electrical Engineering Joint Stock Co (REE) also sold entire 3.924% stake in STB.

Previously, in the ranking report of Moody’s on Sacombank, the rating agency said that Sacombank’s recent decisions to buy back fund shares (STB bought back 100 million treasury shares) was negative when reducing its ability to cope with losses and negatively affect the ability to support its credit growth in the future. – Vietbiz24

Tags: Sacombank, Vietnam banking industry, Vietnam banks, Vietnam finance