BUSINESS IN BRIEF 14/8

Import costs hit textile firmsViet Nam's garment and textile industry remains reliant on imported raw materials, concerning enterprises seeking to take advantage of zero tariffs mandated in the Trans-Pacific Partnership (TPP), which has been under negotiation.Statistics showed that in the first seven months of this year, the total export turnover of garment and textile products reached US$9.636 billion, a rise of 16.3 per cent year-on-year. But, the import of raw materials for the industry hit $7.646 billion, up 18.2 per cent.Nguyen Thi Bich Lien, deputy director of Dong Nai Industrial Garment Co, said dependence on imported raw materials would be the biggest challenge to the country's garment industry when TPP came into force.The TPP's "yarn-forward" rule of origin required nations to use a TPP member-produced yarn in textiles in order to receive duty-free access.However, Viet Nam currently imported raw materials from many countries which were not members of TPP, such as China.Efforts … [Read more...]

Vincom Mega Mall turns the screws on struggling rivals

The launch of Vincom Mega Mall Royal City, the largest underground retail complex in Asia, is expected to dramatically change the retailing landscape in Hanoi, and pose stiff competition to the current retail centres in the city. Vincom Mega Mall introduces many "firsts" to Hanoi, Photo: Duc Thanh During the first opening week, the junction of Nga Tu So and Nguyen Trai streets where the Vincom Mega Mall Royal City is located was surprisingly busy due to thousands of potential customers visiting the centre in their cars and on motorbikes. The mall space was filled with both shoppers and curious visitors despite a rainy weekend. In its white paper "From ice-scream to ice rink" CBRE described the large footfall over the first few days of its opening as "very impressive and greater than one might have ordinarily expected to see in Vietnam shopping centres." "Vincom Mega Mall Royal City has indeed created a big bang in the Hanoi market," the property consultant stated in the white … [Read more...]

South Korean retailer to boost Vietnam investment

South Korea's retail giant Lotte Mart is set to boost its investment in Vietnam in an attempt to expand its presence in the local market, Yonhap News Agency reported. A Lotte Mart supermarlet in Ho Chi Minh City's District 7 The Vietnamese government has given the greenlight for Lotte to raise the capital for its joint venture by US$50 million, the report said. According to news website VnEconomy, Lotte Mart holds an 80 percent stake in its joint venture with local company Minh Van. The venture, Lotte Shopping Vietnam, was inaugurated in 2008. The Korean retailer has opened two outlets in Vietnam, both in Ho Chi Minh City. It plans to have a total of 30 supermarkets in the country. Vietnam's retail sales grew 22.8 percent in the first nine months, according to the General Statistics Office. The growth had eased from the 24.5 percent increase recorded at the end of 2010 as local consumers cut back on spending amid high inflation. … [Read more...]

Lotte Mart staff stop working due to wage dispute

Around 40 cashiers at the Lotte Mart in Ho Chi Minh City's District 7 walked off the job October 28 in protest of what they say is the company's unfair wage policy. Lotte Mart in District 7, HCM City (Photo: Saigon Times)  The workers complained they were paid only VND1.5 million (about US$85) per month on average after nearly one year of working for the supermarket. Lotte, meanwhile, recently announced that it would pay VND2 million per month to new workers performing the same job at a new company outlet.  The protesters said they had filed a request for higher salaries with the company's management board but their demands were rejected. The same day, District 7 Labor Federation representatives came to the supermarket to try and resolve the dispute, but the supermarket's manager refused to meet with them, saying he was too busy.     Lotte Mart is owned by Lotte Shopping Vietnam Co., Ltd., a wholly South Korean-owned company, located at Tan Phong Ward, District 7, HCM City. The … [Read more...]

S. Korea Tops FDI Source in Vietnam

Foreign direct investment (FDI) from South Korea into Vietnam so far this year has reached around US$2.4 billion in 203 projects, three times last years figure, Foreign Investment Agency under the Ministry of Planning and Investment (MPI) reported. With the impressive figure, S. Korea replaced Hong Kong as the biggest investor during the first ten months of the year, to become the number one investor in the Southeast-Asian nation in 2006. The agency said S. Korean investment mostly focuses on industrial production, construction and tourism. S. Korea's leading steel group Posco on November 18 was granted an investment certificate by the MPI for its steel project worth US$1.128 billion in Phu My II Industrial Park in the southern coastal province of Ba Ria-Vung Tau. Meanwhile Kumho Asiana group has kicked off the US$380-million project to produce tires in the southern province of Binh Duong and it has also invested US$260 million in building hotels and apartments in Ho Chi Minh City. … [Read more...]

Compal scales back Vinh Phuc deal

Compal and Foxconn have pledged to continue investing in manufacturing and industrial zone projects in the northern province of Vinh Phuc after the provincial leaders said they violated Vietnamese laws by delaying their investment plans for years. Nguyen Tien Hanh, deputy head at Vinh Phuc Provincial People's Committee's Office, told VIR that both Foxconn and Compal had already sent written documents to the committee as requested. "Once again, Foxconn and Compal reiterated their claim that they intended to continue their investment plans in projects here," said Hanh, who is also director of Vinh Phuc Provincial Investment Promotion Agency. Vinh Phuc Provincial People's Committee in two documents issued last month announced that it would revoke the investment certificates for both Compal and Foxconn's projects if the investors failed to record progress by April 2014. Compal officially proposed to return 227 hectares of industrial land, which were originally earmarked for … [Read more...]

Sacombank receives American Wells Fargo award

The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has been named a good growth bank in commercial sponsorship activities by the American bank Wells Fargo. The award is based on criteria in commercial sponsorship transactions including Letter of Credit (L/C) and Usance Payable at Sight Letter of Credit (UPAS L/C) through Wells Fargo. In a bid to provide high-quality financial products in Vietnam, Sacombank has carried out safe and convenient packages, bringing additional value to its customers. In 2014, the bank’s international settlements reached over 6.8 billion USD, of which revenue from commercial sponsorship activities generated 2.3 billion USD. Wells Fargo, founded in 1852, is the fourth leading bank in the US. It currently provides financial services to 70 million customers including individual customers and corporations.-VNA … [Read more...]

Press digest – April 2

South Africa, VN foster partnership for cooperation and development At a meeting with Speaker of the National Assembly of South Africa Baleka Mbete in Ha Noi, NA Chairman Nguyen Sinh Hung emphasized that Viet Nam attaches much importance to enhancing cooperative ties with South Africa and spoke highly of establishing partnership for cooperation and development between the two countries since 2014. He proposed the two countries promote cooperation’s specifically in bio-technological research and application use, exchange experience in State management on maritime and island scientific research and environmental protection For her part, Mbete congratulated Viet Nam on successful organisation of the IPU-132 with the Ha Noi Declaration and further attributed the success to the host’ intensive preparations for the event’s content and agenda. She hoped that the two legislative bodies can strengthen experience exchange in their performance while enforcing solidarity and … [Read more...]

Sacombank sets up subsidiary in Laos

NDO - The State Bank of Vietnam (SBV) has recently issued Document No.1858/SB-TTGSNH, allowing the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) to upgrade its branch in Laos to a subsidiary wholly owned by Sacombank. The subsidiary bank, located in Chanthabouly district, Vientiane, is named ‘Sacombank Lao Limited’, holding charter capital of US$39 million. Sacombank is obliged to complete the opening of the Lao subsidiary’s operations within 24 months of the SBV’s approval. In addition to Sacombank, in 2014, the SBV also approved the Saigon-Hanoi Commercial Joint Stock Bank (SHB) and the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) to set up their subsidiaries in Laos. … [Read more...]

Bulgarian gets 2 yrs over fake ATM card scam in Vietnam

A Bulgarian man was sentenced Friday to two years in jail by a Vietnam court for using fake ATM cards to withdraw over VND180 million (US$8,500) from banks in the Southeast Asian country last year. >> Bulgarian, Romanian nicked in Vietnam for bank info theft >> Bulgarian caught withdrawing money with fake ATM card Todorov Yordan Valentinov, 31, received the sentence on charges of "using computer networks, telecommunications networks, Internet or digital devices to appropriate property" pursuant to Article 226b of the Penal Code, the Ho Chi Minh City People's Court said at his trial. The foreign man was arrested on October 16, 2013 while he was attempting to withdraw money from an ATM machine in District 1, HCMC with some ATM cards. On searching his room at a hotel in the district, police seized 40 ATM cards, most of them are counterfeit, and VND12.7 million ($600) in cash. After his arrest, Valentinov told police that he arrived at the Tan Son Nhat International Airport … [Read more...]

Bank share dividends decrease in 2013?

The payment of high dividend rates in cash made bank shares grow on a stable basis

(VEN) - At the close of the third quarter, many banks announced and/or paid dividends for 2012. Although the golden age of bank shares is over, dividends remain stable and relatively high. However, profit is not the number-one target of banks in 2013. Dividend double deposit interest While the securities market shows signs of falling, the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) has a plan to pay its shareholders a 16-percent dividend for 2012 with cash in late September this year. There are banks that will pay even higher dividend rates for 2012. Vietinbank said that an amount of cash equal to 16 percent of its VND26.217 trillion chartered capital (the capital before the BTMU became a foreign strategic shareholder of Vietinbank), VND4.195 trillion, will be used to pay out shareholders; state shareholders will be paid almost VND3.367 trillion. Other commercial banks are planning to pay dividends in cash and shares. The Bank for Investment and … [Read more...]

Sacombank opens new headquarters in Laos

The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) inaugurated the new headquarters of its branch in Vientiane, Laos, on August 12.At the inauguration ceremony, Sacombank deputy director Nguyen Minh Tam said over the past five years the branch has provided local clients with convenient financial services, winning their trust. Apart from special promotions, the branch has offered a fast, reliable and low-cost money transfer service between Laos and Vietnam, facilitating business operations. It has also actively participated in community-oriented activities, contributing to poverty reduction in Laos. As of July 31, total assets of Sacombank's branch in Laos were valued at US$102 million. It mobilized US$56 million from depositors and lent out US$73 million. In the next years, the Lao branch aims to become a wholly foreign-invested bank, focusing on diversifying products and services suitable to every region, and further expanding its network to major economic regions./. … [Read more...]

M&A deals exceed US$5 billion

(VEN) - From single business transactions, the mergers and acquisitions (M&A) market in Vietnam grew to a total transaction value exceeding US$5 billion in 2012. However, most big M&A deals in 2012 involved foreign businesses.Foreign investors want to invest in large Vietnamese financial institutions which have been equitizedData from AVM Vietnam show that M&A activities in Vietnam have developed with total transaction value growing fivefold from US$1.08 billion in 2009 to US$5.1 billion last year. "US$5.1 billion is unlikely to be exceeded as many economists forecasted that in 2013 the value of M&A deals in Vietnam would reach US$4 billion," said AVM Vietnam General Director Dang Xuan Minh . However, M&A deals in 2011 and 2012 were much more complicated than those in previous years. Most M&A deals in 2010 took place in the form of one business offering to purchase and take over another business. A typical example was the M&A deals between the Hung Vuong … [Read more...]

Vietnam banks not ready to lower loan interest rates

Some major banks have cut their dong deposit interest rates but said they are not ready to reduce lending rates yet. An unnamed Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank) official was quoted by news website thoibaokinhtesaigon as saying that the recent cuts in rates are only for short-term deposits of one month to two months and aimed at studying the market, and should not be taken as a sign of general rate cuts. It would take some time for the reduction to have an impact on liquidity, and banks cannot lower lending rates in the meantime, the executive said. On July 11 Vietcombank unexpectedly lowered its rate for one-month deposits from 6 percent to 5 percent. The State Bank of Vietnam's cap for one to six months is 7 percent. The Vietnam Bank for Agriculture & Rural Development, or Agribank, also lowered the rate to 5 percent the same day. Soon the Bank for Investment and Development of Vietnam followed. The Vietnam Commercial Joint Stock Bank for … [Read more...]

Fitch maintains ‘B’ ratings for four local banks

Fitch Ratings has maintained the 'B' notch in the Long-Term Issuer Default Ratings (IDRs) for four Vietnamese banks, according to Tuoitrenews. They include the Vietnam Bank for Agriculture and Rural Development (Agribank), the Vietnam Joint-Stock Commercial Bank for Industry and Trade (Vietinbank), the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and the Asia Commercial Bank's (ACB). The US credit rating agency has reaffirmed the 'stable outlook' rate in the IDRs for three of them, excluding ACB with a 'negative outlook'. The agency has also affirmed Vietinbank's outstanding senior notes due 2017 at Long-Term 'B' and a Recovery Rating of 'RR4'. "The rating actions have been taken in conjunction with Fitch's periodic review on Vietnamese banks," Fitch said in its latest new release. The Long-Term IDRs, Support Ratings and Support Rating Floors of Agribank and Vietinbank reflect Fitch's expectation of likely state support as both banks are among those most … [Read more...]

Fitch gives ACB ‘negative’ rating after tycoon arrest

Pedestrians wait to cross the road in front of an Asia Commercial Bank (ACB) branch in Hanoi. Fitch Ratings has affirmed a "negative" outlook for ACB following the arrest of a shareholder tycoon last year. Photo: Bloomberg Fitch Ratings has affirmed a "negative" outlook for Vietnam's Asia Commercial Bank (ACB) following the arrest of a shareholder tycoon last year. The agency released this week the ratings for four Vietnamese major banks, in which it affirmed their Long-Term Issuer Default Ratings (IDRs) at "B". The outlook is "stable" for the Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Joint-Stock Commercial Bank for Industry and Trade (Vietinbank) and the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank). RELATED CONTENT Founder's companies owe Vietnam bank $341 mlnVietnam police probe 4 former ACB execs for fraud; banking clean-up underway Like us on Facebook and scroll down to share your comment According to Fitch, the negative outlook for … [Read more...]

HCM City: Not Using State Budget to Stabilise Market

In 2013, Ho Chi Minh City will not have any companies able to access interest rate-free loans for the market stabilisation programme. The city will facilitate enterprises to contact banks for loans bearing preferential rates of 6 per cent per annum for the short term, and 10 per cent for medium and long terms, to invest in production facilities, livestock, technology, and supply of goods to the market. This opinion was informed by Nguyen Thi Hong, Vice Chairwoman of the HCM City People's Committee at the meeting reviewing the market stabilisation programme for the Lunar New Year or Tet in 2012 and 2013, and on tasks for 2014. HCM City will continue implementing four market stabilisation programmes in 2013 and 2014, starting from April 1, 2013 to March 31, 2014. The number of participating companies rises to 64 in 2013 from 48 in 2012. Only milk companies are unchanged in number, while other commodities have more participants. Selling prices of goods under the market stabilisation … [Read more...]

Sacombank provides VND1 trillion for real estate loans

Nhan Dan Online - The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has announced a credit package of VND1 trillion (US$48 million) for individual customers who aim to purchase, build or repair their properties. Under the package, which will last until May 31, customers can borrow up to 100% of the value of their property transfer, construction and repair contracts for their real estate. The bank will offer loans may up to VND10 billion with a maximum term of ten years for construction and repairing contracts and 15 years for property purchase. A preferential interest rate of 9.9% per annum will be applied to these loans in the first two months. After that, the interest rate will be calculated at the banks mobilised interest rate for the next 13-month term, plus 2% in the next ten months and 4% in the remaining years. In particular, the clients can extend their loan payment up to a year for purchasing property loans and six months for construction and repair of their … [Read more...]

Banks find it difficult to achieve annual profit targets

(VOV) - A number of commercial banks risk falling short of their annual profit targets after being disadvantaged by strict lending controls, low credit growth rates, and rising bad debts. According to the Joint Stock Commercial Bank for Foreign Trade of Vietnam's (Vietcombank) third quarter report, most banks' margins were disappointingly lower than in the two previous quarters and even compared to the same quarter last year. Experts predict bank profits will see little or no improvement over the last two months of 2012 and the banking system's 2012 credit growth is estimated at only 5 percent. The State Bank of Vietnam (SBV)'s attempts to increase credit quotas for 10 banks have had a negligible impact on the credit growth of the banking system as a whole. Still worse, the banking sector's difficulties are unlikely to ease next year. By late September, the pre-tax profit of the Vietnam Export Import Commercial Joint Stock Bank (Eximbank) had fallen by 9.4 percent from a … [Read more...]

Additional VND1 trillion for City’s Tet price-stabilisation programme

At the signing ceremony Nhan Dan - The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) will provide VND1 trillion (US$48 million) for Ho Chi Minh City's price stabilisation effort in preparation for the upcoming lunar New Year (Tet) festival. Sacombank and the City Department of Industry and Trade signed an agreement on November 27 for a financial package to help support businesses to stockpile Tet goods while maintaining stable prices at the city market. Under the agreement, SCB will offer loans at preferential rates of 10% per year in the first three months for household businesses, small traders and enterprises in 24 inner and outer city's districts. The loans will last through January 2013 with a maximum term of six months for enterprises and one year for household businesses and small traders. To date, commercial banks in the city have disbursed VND77 trillion (US$3.7 billion) out of the VND200 trillion (US$9.6 billion) package for the city's price … [Read more...]