Eximbank irregularities made known at EGM

Van Thai Bao Nhi, deputy general director of Eximbank, cited a central bank report on the inspection conducted in March as saying that share holdings by some individuals in the name of others accounted for 7.85% of the bank’s total shares each. The prevailing rules allow an individual to own a maximum of 5% of a commercial bank’s shares.

Following the inspectors’ request to eliminate cross ownership among banks, Eximbank wrote to the central bank and Sacombank informing its capital withdrawal from Sacombank.

Regarding lending activity, the bank’s 2014 financial report showed 30% of its outstanding loans were guaranteed. However, inspectors found lending irregularities, so Eximbank was told to resolve the issue and report to the central bank on a monthly basis.

Eximbank racked up accumulated losses of VND1.62 trillion at the end of last year and bad debt accounted for 7.56% of the bank’s total outstanding loans. However, the bank has sold around VND2 trillion in bad debt and recovered VND775 billion debt in the year to date. 

Another irregularity was that Eximbank provided loans for Eximland to buy the properties owned by the bank.

According to Nguyen Van Dung, head of the Banking Supervision and Inspection Agency in HCMC, Eximbank is required to make known some inspection results and name those individuals responsible for committing such irregularities, and propose coping measures.

“If the measures do not meet the requirements, we will ask the bank to revise them,” Dung said at the shareholders meeting, adding the bank will also have to draw up business plans for the 2015-2020 period.

By November 30, Eximbank’s assets had totaled about VND127 trillion, down 21.15% against early this year and equivalent to 70.6% of the target.

The decline in its assets is mostly caused by a fall of VND35.54 trillion in capital mobilization on the inter-bank market.

Capital mobilization in the January-November period fell 0.2% from last year to VND101.28 trillion, equivalent to four-fifths of the target. 

By end-November, total outstanding loans and corporate bonds had dropped 1.9% to VND96.05 trillion. The fall in outstanding loans at Eximbank resulted from the restructuring of its loan portfolio, a reduction in unsecured loans, bad debt sales to Vietnam Asset Management Company (VAMC) and an increase in retail credit.

The bank’s current bad debt stands at some VND1.54 trillion, a 28% drop against last year and equivalent to 1.82% of total outstanding loans. The bad debt ratio was 2.46% last year.

Though its pre-tax profit amounted to VND552 billion as of last month, 55.2% of the year’s target, Eximbank has set aside VND1.17 trillion for risk provisions. The bank may have to make more risk provisions this month depending on the settlement of bad debt.

Shareholders at Eximbank’s extraordinary meeting on December 15 voted for new members of the board of directors and the supervisory board for a new term.

The board of directors has 11 members for the sixth term lasting until 2020, up from the current nine. Five members were also picked for the supervisory board.

According to the vote results announced on December 15 afternoon, the nine new members of the board of directors are Cao Xuan Ninh, Le Van Quyet, Ngo Thanh Tung, Hoang Tuan Khai, Dang Anh Mai, Nguyen Quang Thong, Naoki Nishizama, Yasuhiro Saitoh and Le Minh Quoc, with the last being an independent member.

With two remaining members unidentified, Eximbank’s vice chairman Pham Huu Phu said they will be added later.

Of the new board members, Cao Xuan Ninh and Le Van Quyet used to work at Vietcombank.

Ninh was nominated by a group of shareholders owning 11.287% of total shares. He neither holds shares nor represents capital holding by any institution at Eximbank.

Meanwhile, the supervisory board of Eximbank in the 2015-2020 term consists of Tran Le Quyet, Tran Ngoc Dung, Trinh Bao Quoc, Dang Huu Tien and Pham Thi Mai Phuong.