Banks finance securities companies more than USD20 billion in 2020

27-Jan-2021 Intellasia | VnEconomy | 7:22 AM Print This Post

Data from the financial statements of securities showed that banks financed more than 20 billion US dollars in 2020 to the stock market.

The total debts of 25 securities companies with large margin lending balance in the market by the end of April 2020 reached up to 84.977 trillion dong, up by an average of 48.9 percent compared to the beginning of the year. However, the amount of bank loans arising in 2020 of 21 securities companies (excluding VPS, VCSC, TVSI, and VIX) was 461.467 trillion dong (equivalent to about 20 billion US dollars).

The margin cash flows from securities companies are considered an important capital source supporting the market in all circumstances. The statistics in the fourth quarter (Q4) of 2020 of 25 securities having outstanding loans with customers (in which margin loans account for 95 percent of the total outstanding loans) showed that the outstanding loans to customers by the end of Q4 of 2020 reached 85.762 trillion dong, an average increase of 57.4 percent compared to the beginning of the year, 39.8 percent higher than the end of Q3 of 2020.

Leading the group of securities companies with high lending to customers is Mirae Asset with 11.132 trillion dong (up by 50.7%), followed by SSI with 9.226 trillion dong (up by 72.2%), HSC with 8.624 trillion dong (up by 82%), VPS with 5.813 trillion dong (up by 142.8%), VNDS with 4.706 trillion dong (up by 63%), and KIS with 4.566 trillion dong (up by 60.4%).

The funding for securities companies, in addition to equity, the remaining mainly comes from loans including bank loans and the short and long-term bond issuance.

Specifically, of the above 84.977 trillion dong total debts of 25 securities companies mentioned in the above, short-term bank loans dominated with more than 90 percent of the total loans, up by an average of 65 percent in 2020 and 28.6 percent compared to the previous three months.

The top securities companies with fast increasing debt rate included ACBS (255.6%), HSC (180.6%), CTS (VietinBank Securities, 143.4%), VCBS (107.4%), KIS (99.9%), BVSC (98.99%), Yuanta (82.6%), Mirae Asset (77.8%), FPTS (65.1%), MBS (63.8%), etc.

Considering the scale of borrowings, SSI led with the balance of more than 24.498 trillion dong including 1.146,5 trillion dong of short-term convertible bonds; followed by VNDS with 10.162 trillion dong, VPS with 6.978 trillion dong, HSC with 6.717 trillion dong, Mirae Asset with 6.336 trillion dong, and KB Securities with 3.375 trillion dong.

Thus, the outstanding loans to customers of 25 large securities companies had a faster growth rate than the total borrowing growth rate of these companies in 2020. This means that the margin lending activities of customers in Q4 of 2020 increased dramatically. Previously, the nine-month data showed that the borrowing growth rate of securities companies was higher than the growth of outstanding loans to customers.

Although the total debts of securities companies by the end of 2020 was only 84.977 trillion dong in which the short-term loans were 76.852 trillion dong, statistics showed that the turnover of borrowing and repaying transactions in the year (including overdrafts) of securities companies was many times larger than the balance at the end of the period.

Twenty-one out of the 25 securities companies with large margin loans excluding VPS, VCSC, TVSI and VIX showed that in 2020, the number of short-term debts reached 461.467 trillion dong, equivalent to 20 billion US dollars, up by six fold compared to the number of outstanding short-term loans at the end of the period.

In particular, SSI had 128.575 trillion dong of loans arising (5.2 times larger than the total outstanding loans at the end of the term), while that of VNDS was 121.326 trillion dong (12 times larger), of HSC was 25.320 trillion dong (3.8 times larger), of SHS was 19.644 trillion dong (10.4 times larger), of Mirae Asset was 18.652 trillion dong (three times larger), of KB Securities was 18.272 trillion dong (5.4 times larger).

Thus, banks financed more than 20 billion US dollars to the stock market in 2020. With incomplete data of the above 21 companies, Vietcombank and BIDV are banks that strongly financed short-term capital for securities companies. Domestic credit institutions that offer significant financing to securities companies were Vietcombank (financing SSI, KIS, MBS, ACBS, KB Securities, FPTS, etc.), BIDV (financing SSI, KIS, BVSC, VCBS, TCBS, KB Securities, etc.), MSB (financing MBS, KS Securities, FPTS, BVSC, ACBS, etc.), VPBank, TPBank, ABBank, VIB, HDBank, etc.

Foreign financial organisations including their branches in Vietnam that financed securities companies included Sinopac (financing SSI), WooriBank (financing MBS, ACB, KB Securities, FPTS, etc.), Kookmin Bank (financing KB Securities), CTBC (financing MBS, VCBS, TCBS, etc.), Indovinabank (financing KB Securities, MBS, BVSC, TCBS, VCBS, etc.), SMBC Singapore, ShinhanBank, etc.


Category: Finance, Vietnam

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