Banks deny reports of heavy share trading losses
14-MAY-2008 Intellasia | Vietstock
May 14, 2008 - 7:09:00 AM
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Local banks have denied rumours circulating since last Tuesday that some lenders had taken heavy losses on stock investments because of the share market's 46% plunge this year.
Asia Commercial Bank, the only bank listed on Hanoi's exchange, slipped 2,300 dong, hitting the 3% daily trading limit, to close at 76,900 dong on Wednesday.
In a bid to reassure investors, Asia Commercial Bank Investment Board Chair Nguyen Duc Kien Thursday said the bank's exposure to the share market was small.
"Asia Commercial Bank has invested 1.18 trillion dong (US$111.4 million) in shares, of which 674 billion dong (US$41.7 million) was used to buy shares of strategic partners at preferential prices," Kien said.
"These investments, which make up only 1.38% of the bank's total asset, are long-term and not affected by market moves.
Last year, we earned 1.2 billion dong (US$74.2 million) from investing in shares and also reclaimed all of the starting capital pumped in the sector.
"We are now investing in bonds. We bought bonds worth 200 billion dong (US$12.4 million) two days ago."
Also on Thursday, Vietnam International Commercial Joint-Stock
Bank, an unlisted bank known as VIB Bank, revealed it had invested 99.37% of 6.67 trillion dong (US$412 million) in the government's bonds and bills last year, with the remainder used to buy shares.
The bank's share price on the informal market, known as over-the-counter (OTC) market, fell to 16,000 dong-17,000 dong from 17,000 dong-18,000 dong last Wednesday.
The Hanoi-based bank said its business in the first three months of the year was stable, with total assets increasing more than 110% year-on-year.
The share price of many unlisted banks on the OTC market slumped Wednesday because of the rumours banks were overexposed to the share market.
Last Wednesday, Vietcombank dropped to 38,000 dong-40,000 dong from 46,000 dong-48,000 dong, Military Bank fell to 18,000 dong-19,000 dong from 23,000 dong-24,000 dong, An Binh Bank slipped to 10,000 dong-11,000 dong from 12,000 dong-13,000 dong and Export-Import Bank declined to 26,000 dong-27,000 dong from 30,000 dong-31,000 dong.
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