Overseas business results of the Big4 banks in 2020

20-Oct-2021 Intellasia | BizLIVE | 5:02 AM Print This Post

Minister of Finance Ho Duc Phoc has sent the National Assembly a report of the government on investment, management and use of state capital in businesses nationwide in 2020.

Separating the group of state-owned commercial banks including Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), the minister included relatively detailed information about the business results of this group in 2020.

The report also summarised the overseas capital investment of these banks with notable information.

Specifically, for VietinBank, the balance of capital contributions and share purchases in the bank’s subsidiaries, affiliated companies and other capital recipients by the end of 2020 reached 5.928 trillion dong.

This number included the investments in seven subsidiaries and a bank with total value of 3.840 trillion dong, accounting for 65 percent of the total portfolio value; the investment in an affiliated company with total value of 1.689 trillion dong, accounting for 28 percent of the total portfolio value; two available-for-sale investments (equity securities) with total value of 377 billion dong, accounting for six percent of the total portfolio value; and two other long-term investments with total value of 23 billion dong, accounting for 0.4 percent of the total portfolio value.

According to VietinBank’s report, the business of all VietinBank’s subsidiaries in the domestic and foreign countries in 2020 was all profitable and the profit transferred to the bank is expected to be over 200 billion dong.

For BIDV, the total value of investments and capital contributions was 8.198 trillion dong, accounting for 19.15 percent of the charter capital and reserve fund for supplementing chatter capital, unchanged compared to the end of 2019.

This capital source of BIDV was invested in eight subsidiaries with the amount of 5.829,5 trillion dong, accounting for 71 percent of the total portfolio value (unchanged compared to 2019). The after-tax profit of the subsidiaries in 2020 was 542 billion dong, up by 80 billion dong (17.3%) compared to 2019.

BIDV’s investment in four affiliated companies was 2.214 trillion dong, accounting for 27 percent of the total portfolio value. The after-tax profit was 450 billion dong, down by 76 percent (negative 14.4%) compared to the end of 2019. BIDV MetLife insurance company alone posted a loss of 13.1 billion dong.

BIDV has four overseas investment projects, including Lao Viet Joint Venture Bank (LVB) in Laos, BIDV International Company Limited (BIDVI) in Hong Kong, BIDV Yangon branch in Myanmar, and Bank for Investment and Development of Cambodia (BIDC) in Cambodia.

Since BIDV Yangon branch was negatively affected by the political crisis in Myanmar, most customers’ activities were delayed, interbank activities were blocked, the systems of telecommunications, internet and express delivery were unstable with moderate operation.

BIDVI in Hong Kong is in the process of completing the procedures to close the operation.

For Vietcombank, the total investments of Vietcombank were 5.8587 trillion dong, accounting for 15.06 percent of the bank’s charter capital and reserve fund for supplementing charter capital, down by 270 billion dong (negative 4.6%) compared to the end of 2019 (due to the divestment in Cardif VCLI).

Specifically, Vietcombank had investments in 10 subsidiaries and affiliated companies with total investment value of 3.999 trillion dong, accounting for 72 percent of the portfolio value. The business performance of all units was stable.

Vietcombank had other 11 long-term investments with total investment value of 1.588 trillion dong, accounting for 28.4 of the total portfolio value. Vietcombank’s other long-term portfolio mainly focused on credit institutions (accounting for 71%) and aviation (19%).

Vietcombank had three overseas investments, including Vietcombank Money Transfer Company (VCBM) with Vietcombank’s ownership rate of 87.5%), Vietnam Hong Kong Finance Company (VFC) and Vietcombank Laos Limited Company (wholly-owned by Vietcombank).

As of December 31st 2020, the production and business activities of investment projects in VCBM and VCB Laos were profitable, while VFC suffered a loss.

For Agribank, the total investment value was 2.440,4 trillion dong, including five subsidiaries (three units wholly owned by Agribank and two units with the bank’s shareholding of less than 100 percent of charter capital); and five other long-term investments.

In addition, the HCM City People’s Court has decided to declare bankruptcy of Financial Leasing II company Agribank’s wholly-owned unit.

In 2020, Agribank received 46.25 billion dong of dividends from its investments, up by 17.45 billion (61%) compared to the dividends the bank received in 2019. As the investment efficiency increased, Agribank did not have to make any additional deductions and received 270.2 billion dong of reversal of provisions for financial investments.

Agribank has a branch in Cambodia with total investment of 39 million US dollars, equivalent to 663.858 billion dong. As of December 31st 2020, the difference between revenue and expenditure (excluding pre-tax salaries) of Agribank’s Cambodia branch in 2020 was 24.5 billion dong.

 

Category: Finance, Vietnam

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