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BUSINESS IN BRIEF 21/8
Belgium
finances green growth in Vietnam
The
facility will promote green initiatives including energy efficiency,
transferring clean technology transfer and waste water management.
Under
the agreement, a fund for green growth initiatives will be set up with the
CBU
car imports down in July
The
General Statistics Office (GSO) of
The
It was
followed by
The
GSO attributed July’s falling import to a slight reduction in the domestic
consumption. The Vietnam Automobile Manufactures’ Association (VAMA) said the
total number of cars sold in July only reached 9,360 units, down 3% against
June.
In
addition, the import tax on secondhand sedans of 9 or less than 9 seats
increased by US$1,500 to US$5,000 each as of June 20.
Bloomberg
highlights
The
Bloomberg
quote Tok Teng Sai, president of the Federation of Malaysian Bird’s Nest
Merchants Association, as saying that the demand for bird’s nest, once
reserved for emperors and their courts, has created a global market with
annual revenue as high as US$5 billion that caters to Asia’s growing wealthy
consumers.
The
paper reported that in
In
mid-2011, VinaCapital invested US$7.5 million in a bird house in central
According
to Bloomberg, authorities in Phan Rang-Thap Cham of central coastal Binh
Thuan province are working on a plan to expand the local bird’s nest industry
to 2.8 million birds by 2020. The largest bird’s nest house in the province
now generates about US$50,000 of bird’s nest monthly.
VietJet
Air signs technical deal with German company
VietJet
Air airline signed a technical cooperation agreement with Lufthansa Technik
company of
Lufhansa
Technik is
Under
the agreement, Lufthansa Technik will offer its best technological solutions
in terms of maintenance, repair and overhaul, provide consultancy for
important technical projects and train the airline’s staff.
For
its part, VietJet Air will support Luthansa Technik in penetrating a large
market in the Asia-Pacific region.
Addressing
the signing ceremony, President and CEO of Lufthansa Technik, August Wilhelm
Henningsen, spoke highly of VietJet Air’s long-term development roadmap.
He
added that Lufthansa is committed to providing the airline with the world’s
leading technical management services, improving the quality and ensuring the
safety of flights for passengers.
For
his part, Executive Director for VietJet Air Luu Duc Khanh said cooperation
with the German company will meet the flight crew’s strict demand for
operation and maintenance skills.
VietJet
Air now runs nearly 500 flights per week including inbound flights to 11
destinations in the country and those outbound flights on two international
air routes to
Boosting
exports to Malaysia
Vietnamese
businesses are encouraged to penetrate deep into
The
Vietnam Chamber of Commerce and Industry (VCCI) says Malaysia’s demand for
imported goods has increased over the years, from just US$117 billion worth
of imports in 2009 to US$153 billion in 2010 and US$168 billion in 2011.
For
the first time in the past decade
Vietnam
Customs statistics show that Vietnam-Malaysia trade continued to grow and
flourish in the first seven months of this year, with Vietnamese exports
generating US$2.87 billion.
Major
export items include crude oil, rubber, rice, computers and spare parts,
phone handsets and spare parts, coffee, seafood, steel, vehicles, machinery
and equipment.
Shazryll
Zahiran, Malaysian Consul General in
Vu Van
Canh, Vietnamese trade counsellor in
According
to Canh, two-way trade this year is estimated at between US$8.5-9 billion, of
which US$5.2 billion is from Vietnamese exports, mostly crude oil, rubber,
rice, steel, and electronic appliances.
As of
March 2013
That
was the outcome of a meeting between the Vietnamese Deputy Minister of
Agriculture and Rural Development Vu Van Tam and Saudi Arabian Deputy
Minister of Agriculture Raber bin Mohammed Al-Shihri in
The
two sides expressed their wish to expand cooperation in trade and investment
in the fields of husbandry, aquaculture, agriculture and processing.
They
also agreed to build detailed plans for cooperation in aquaculture and
exchanges between technicians from both countries.
Vietnam
attends annual World Bank meetings in Washington
A
State Bank of Vietnam (SBV) delegation will attend the International Monetary
Fund/World Bank (IMF/WB) annual meetings in
This
year’s meetings will review IMF/WB operations in 2013, discuss economic and
financial trends in recent times and solutions to arising problems, and set
orientations for the following years.
SBV
leaders will hold bilateral meetings with leaders of Central Banks and
commercial banks of several countries and international financial
organisations to seek cooperative opportunities.
They
will take part in the IMF conference at the invitation of IMF Director
General, and Vietnamese commercial banks can register on IMF/WB websites if
they wish to attend the event.
Footwear
sector cashes in on bulk orders
Local
footwear exporters are expected to surpass 2013’s US$9.7 billion export
earnings target, as Japanese importers are shifting their orders from
According
to the Vietnam Leather and Footwear Association (Lefaso), the export earnings
from Vietnamese leather and footwear products will increase sharply if the
Trans-Pacific Partnership (TPP) agreement and the Vietnam-EU Free Trade
Agreement (FTA) are signed.
The
Association said that TPP and FTA will reduce tax rates to 0%, enabling
Vietnamese footwear exports to be more competitive than those produced in
Local
exporters have already received first orders from foreign partners for the first
quarter of next year, said Lefaso.
Lien
Phat company in Binh Duong province said the firm has been selected by a
Japanese importer to provide footwear products to the Japanese market until
the end of this year.
Lefaso’s
statistics showed that revenue from leather and footwear exports was
estimated at more than US$3.99 billion in the first half of 2013, a
year-on-year increase of 14%.
Seafood
firms must ensure more transparent product information
Local
fisheries enterprises often have not provided transparent information about
their products, including origin information, export information and
production process. This lowers the competitiveness for the export of local
seafood products, according to experts in the agricultural industry.
Dang
Kim Son, head of the Agriculture and Rural Development Ministry's Policy and
Development Institute, said many local fisheries had hidden the information
about products because they thought that action would bring more benefit than
transparency. They also thought that the ambiguity of the information would
create opportunities to sell good and also bad quality products.
If
this situation continued, it would be the true business enterprises and also
trade marks of agricultural and seafood products that would be affected.
Then, both good and bad business would suffer losses from lack of transparent
information, Son said.
The
enterprises also had not considered transparency in product information to be
an effective tool for increasing the competitive ability of their products on
the world market.
The
lack of traceable information has lead to trade fraud, including selling
counterfeit and poor-quality products together with genuine products, and the
loss of customer confidence.
Therefore,
local seafood exports should have transparent product information to ensure
traceability as required, build customer confidence and increase the
competitiveness of Vietnamese products on the world market, Son said.
Nguyen
Huu Dung, deputy chairman of the Viet Nam Association of Seafood Exporters
and Producers (VASEP), said traceability must be an obligatory condition of
the Government and the international standards organisations for
The
Department of African, West and South Asian Markets under the Ministry of
Industry and Trade reports that two-way trade between Viet Nam and the GCC
has recorded a rapid growth, rising by more than 12.4 times, from US$392.4
million in 2003 to $4.87 billion in 2012.
Last
year,
Vietnamese
goods are becoming increasingly popular in the GCC market, which is a
grouping of
During
the reviewed period, the nation's exports to the GCC ranged from farm
produce, consumer and processed goods to 39 different commodity groups, many
of which have enjoyed a surge in turnover.
The
other main exports included computers, seafood and pepper.
A
study conducted by the Ministry of Industry and Trade shows that the GCC
market has a buoyant demand for goods that Viet Nam is strong in, for example
textiles and garments, footwear, seafood, wood products, farm produce
including foodstuffs, construction materials, handicrafts, mobile phones,
computers and electronic components.
Master
plan to boost textile and garment industry
The
Viet Nam National Textile and Garment Group (Vinatex) will complete a master
plan by the end of this year to improve the industry's productivity and
quality.
Vinatex
general director Uong Tien Thinh said at a seminar in
When
penetrating international markets, apart from competition on prices, evidence
of corporate social responsibility was also important since consumers in
developed countries do not just look at product quality, but how it has been
produced, he said.
Over
the past several years, many enterprises in the garment and textiles
industry, especially garment makers, have raised their productivity and
quality, he said.
Pham
Le Hoang of Vinatex's technology department said the domestic industry's
improvements notwithstanding, there was still a considerable gap between
Within
the domestic industry itself, there were wide disparities in productivity and
quality between enterprises, he added.
He
said enterprises should replace old equipment and apply new management tools
like lean manufacturing and TQM (Total Quality Management).
The
plan to improve productivity and quality will formulate a new set of quality
standards for the industry, Thinh said.
"There
will be seminars on technology transfer in which enterprises that have high
productivity will support those that are not doing as well," he added.
Phan
Cong Hop, deputy head of the Ministry of Industry and Trade's Science and
Technology Department, noted that the Prime Minister had approved in 2010 a
10-year programme to improve productivity and product quality of Vietnamese
firms.
Under
the programme, the Ministry of Industry and Trade has launched a project
targeting industrial goods, including garments and textiles, footwear,
plastic and steel.
The
project seeks to facilitate the application of modern technology in
industrial production, the production of value-added products, and the
setting of higher industrial standards.
He
said the State would provide financial support for industry and trade
enterprises to provide technical training to their staff, build quality
standards, research and evaluate products, and pilot new models of quality
and productivity management.
Exports
to
Telephones
and phone components ranked first in terms of export turnover with more than
$383 million in revenue (up 25.1 per cent).
Computers,
electrical products and components came next with revenue of $112.7 million
(up 156.9 per cent).
Other
products recording high export value include garments, pepper, confectionery
and cereals, according to the Ministry of Industry and Trade's Trade and
Industry Information Centre.
Phu
Quoc Fish Sauce wins EU approval
The
Phu Quoc Fish Sauce Association yesterday received the EU Certificate of
Protected Designation of Origin of Phu Quoc (PDO "Phu Quoc").
The
certificate was handed over by Vice Minister of Trade and Industry cum
Chairwoman of the Steering Committee of the European Trade Policy and
Investment Support Project (EU-MUTRAP) Ho Thi Kim Thoa.
Earlier
in mid July at the European Commission premise in
The
Phu Quoc Extract of Fish is the first product from an ASEAN country to obtain
the PDO protection in the territory of the 28 EU members, and it is the first
Vietnamese Geographical Indication to be recognised and protected in the EU.
This
important achievement has been obtained with the technical support of the EU
through the MUTRAP projects (phase II and III).
Being
protected in the EU market under the PDO Phu Quoc, the only fish sauce
produced and bottled in the Phu Quoc islands can be distributed under that
name.
This
recognition will ensure consumers enjoy specific qualities and authenticity,
as well as to prevent the illegal presence of pirated products and counterfeiting.
Dr.
Franz Jessen, Ambassador, Head of the Delegation of the EU to
He
further said, "the protection ensured in the EU will result in a price
premium that will directly benefit the Vietnamese producers. It is a clear
example of the potential of the recognition of Vietnamese GI (Geographic
Indication) products. The EU-Viet Nam FTA represents a great opportunity to
expand the protection of Vietnamese GIs."
The
ceremony was followed by a workshop on "Regulations-Measures of Quality
Control and promotion of Phu Quoc fish sauce" organised by the Kien Giang
Provincial Department of Science and Technology in co-operation with the
EU-MUTRAP.
Production
of Phu Quoc fish sauce reached its peak in 2012 (around 25 million litres),
however, a decline is expected in 2013 due to a severe shortage of anchovies
that has recently affected Phu Quoc producers.
Ensuring
the quality of inputs and production of Phu Quoc fish sauce in compliance
with the EU PDO registration is therefore one of the main concerns for the
Quality Control Committee of Phu Quoc fish sauce, as well as for all
enterprises which expect to be granted the use of the EU Phu Quoc PDO.
Fighting
pirated products and counterfeits is also essential in the Vietnamese
domestic market, so it is therefore crucial to organise trade promotions and
marketing activities to raise awareness among enterprises and consumers about
the authenticity that only fish sauce labelled with the PDO "Phu
Quoc" can assure.
First
virtual prepaid card launched in Viet Nam
The
Viet Nam Prosperity Bank (VPBank) yesterday launched the first prepaid online
Smartcash Visa Card in
The
State Bank of Viet Nam (SBV) has permitted the bank to pilot the cards for
deposits, transfers, e-commerce transactions and cash withdrawals. The
maximum limit for a prepaid virtual Visa SmartCash card will be VND5 million
(US$238).
Speaking
at the launch ceremony, Lorijion Bacchi, Visa country director to
Online
purchasing is becoming more popular in
Trade
exhibition opens in central city
The
Central Viet Nam Trade Fair opened last Friday in
The
fair features more than 300 pavilions showcasing garments and textiles,
handicrafts, household utensils, farm produce and food from the region.
The
provincial Department of Industry and Trade Director, Nguyen Kim Phuong, said
the trade fair aimed to encourage more Vietnamese people to use Vietnamese
goods. It will run until Thursday this week.
Tan
Tao to continue power project work
Despite
a lack of work for three years, the Tan Tao Group still wanted to continue
building a huge thermal power plant in
A week
ago, the provincial People's Committee petitioned the State and the Ministry
of Industry and Trade to revoke the investment licence for the Kien Luong
plant, estimated to cost US$6.7 billion.
"We
will shift the form of the project from build-own-operate (BOO) to
build-operation-transfer (BOT)," Minh told baodautu.vn, adding that the
group would call for other investors who complied with the Government
guarantee undertaking (GGU) for the project.
Minh
blamed the plant's sluggish implementation to a failure to negotiate
power-purchase contracts with the Electricity of Viet Nam - and lack of
capital.
He
said progress would be accelerated if a Government guarantee was received,
adding that the group had pumped $240 million into infrastructure and land
clearance.
In
August 2008, the Prime Minister approved the three-stage project, which
includes a 4,400 - 5,200MW thermal power plant and the Nam Du Deep Seaport on
An Son Island, 60km from the plant.
The
group's subsidiary, Tan Tao Investment and Industry Corporation (ITACO), is
licensed to invest $6.7 billion into the Kien Luong Thermal Power project.
According
to the licence granted to ITACO, construction of the first stage of the
project, with an output of 1,200MW, is scheduled for completion by the end of
this year.
After
receiving a licence two years ago, ITACO filled 88ha of the site, built an
8km embankment and paid compensation to families forced to move.
But
construction of the project was suspended in August 2010, and no further work
was done because ITACO failed to seek funds for the project.
In
late April, the provincial People's Committee warned that it would halt the
project if ITACO failed to arrange capital for investment in Kien Luong Power
Centre before June 30.
Despite
being licensed five years ago, the project has barely made headway.
"In
past years, local authorities have done their responsibilities. The next
decision depends on the State and relevant ministries," Huynh Vinh Lac
from the provincial People's Committee said.
Local
firms learn about targeted marketing
Marketing
targeted at shoppers is becoming increasingly important in the marketplace,
experts told a seminar in
With
the economy still in poor shape, shoppers are thinking harder about every
item they put in their basket, so understanding their behaviors and
motivations has become more critical than ever, they said.
Nguyen
Pham Yen Nhi, customer marketing manager at consumer giant Unilever, said
there are many factors affecting shoppers' purchasing decision, including
place of purchase and how long they can spend for their purchase.
Sellers
must find appropriate ways to display their products and have suitable
marketing plans, she said.
With
the motorbike being the main means of transport for most Vietnamese shoppers,
manufacturers need to carefully consider the size products.
With
70 per cent of goods being distributed through traditional retail channels
like markets and grocery shops, businesses need to focus on improving
marketing for this channel.
There
are differences between northern and southern as well as rural and urban
markets, so businesses need to carefully study them geographically.
Organised
by the Business Association of High-Quality Vietnamese Goods and the Leading
Sales Training and
Labourers
in RoK encouraged to return home on schedule
The
Vietnamese Ministry of Labour, Invalids and Social Affair (MoLISA) has urged
relevant agencies to take drastic measures to solve the issue of illegal
labourers in the the
Ambassador
to the RoK Tran Trong Toan made the statement at the second meeting with
Vietnamese workers jointly held by the Overseas Workers Centre in Cheonan
city and the Vietnamese Embassy on August 18.
These
measures include cooperating with local authorities to ask families to
persuade their members to return home after finishing their labour contracts,
limiting the recruitment in hamlets and wards which have large numbers of
illegal labourers in the RoK, and making guest workers fully aware of legal
matters before leaving the homeland for the RoK.
Ambassador
Toan said over the past year the RoK has received tens of thousands of
Vietnamese labourers to work in different industries.
Most
of them are skilful, creative and hardworking.
Since
August 2004 more than 72,000 Vietnamese workers have been sent to the RoK
under the Korea Employment Permit System (EPS) programme.
However,
as of 2011 the number of Vietnamese labourers illegally staying and working
in the RoK after their contracts expire has increased rapidly and has
resulted in the RoK’s Ministry of Labour and Employment’s decision not to
extend the Memorandum of Understanding (MoU) on sending Vietnamese workers to
the RoK under the EPS programme which was already ineffective by August 29,
2012.
The
number of Vietnamese workers refusing to return home on schedule in 2012 and
the first half of this year has decreased but the figure is still higher than
the average rate of around 20 percent recorded in 15 other countries having
their labourers working in the RoK.
Head
of the Overseas Worker Centre Nguyen Duc Long explained about the two
governments’ policies in favour of Vietnamese workers who agree to return
home right after completing their contracts in the RoK.
Accordingly,
for those who have worked for one employer and agree to return home on
schedule after four years and 10 months or six years on end can be directly
employed by the RoK without having to take any Korean language test.
In
fact, nearly 1,300 Vietnamese workers have come back to work in the RoK after
returning home.
By far
more than 1,000 Vietnamese workers have registered to attend the 8th special
computer based test (CBT) on Korean language on August 26.
Three-quarter
of nearly 2,000 Vietnamese workers selected by RoK employers have already
left for the RoK, while about 4,900 are going to have their labour contracts
expired in the last six months of this year.
Coal
and mineral producers proposes reduction of export tax
Vietnam
National Coal Mineral Industries Group (Vinacomin) has recently proposed to
the Government and the Ministry of Finance to adjust coal export tariff to 10
percent as before.
According
to Vinacomin, in the past two months, after export tariff was lifted from 10
percent to 13 percent, coal exports have fallen by 2 million tons.
Coal
consumption for 2013 is now estimated at around 36-37 million tons, down 20
million tons compared to the previous year. Earlier, the company targeted
consumption of 39 tons. Thus, national budget revenue will decrease by VND1
trillion.
Successful
operation of country’s first steam boiler
Vung
Ang Thermo-Power Plant No.1 in Ha Tinh Province has just announced the
success of a pilot project to operate the country’s first steam boiler.
With
investments from Vietnam Oil and Gas Group who worked with Vietnam Machinery
Installation Corporation, the steam boiler engine was the effort of more than
500 engineers and workers.
The
steam boiler will have a five day trial run to accumulate heat and will
generate electricity in the fourth quarter of 2013.
The
1,200 MW Vung Ang Thermo-Power Plant No.1, which has an investment capital of
US$1.5 billion, in the central
This
project is the biggest unit installed in the country and expected to supply
around 7.2 billion kilowatts of electricity each year to the national grid,
with turnover of VND4.9 trillion annually.
Veggie
market whets appetites in HCMC
The
vegetarian food market in
"We're
sorry, could you please call again later? We're very busy serving our
customers at the moment," a salesclerk of the An Nhien vegetarian
restaurant in District 3 told Viet Nam News yesterday evening.
Taking
place in the seventh lunar month or the spirit month, the festival promotes
vegetarian food.
Vegetarian
restaurants are also doing brisk business in many parts of the city,
attracting visitors with healthy food.
Vegetarian
food is sold not only at street markets but also in shops and supermarkets,
such as Co.op Mart, Satramart, Big C and Maximark. Types of vegetarian food
vary from instant, semi-processed to frozen, and come with a range of spices.
According
to retailers, vegetarian food has seen stable growth in recent years. At the
same time, new kinds of products have been introduced into the market,
especially on such special occasions as festivals and full moon days.
Vegetarian
food provided by companies such as Au Lac, Vissa, SG Food and Cau Tre are now
popular. They do not only bring high quality but also different types of
products to customers.
"On
occasions like this, restaurants in the city often make new-fangled kinds of
vegetarian food to serve different tastes of a much greater number of
customers," said vegetarian Dang Hong Ngoc.
In
addition to normal dishes like vegetarian rice and "beef"
vermicelli, there are now also rolled noodles and "roast meat"
vermicelli, she said.
During
the Vu Lan season, which according to legend is to remember the dead,
supermarkets do not only increase the amount of vegetarian food but also
launch promotional campaigns to encourage customers.
Seminar
to host
The
seminar is one of the events marking the 40th anniversary of Vietnam-Japan
and ASEAN-Japan friendship and co-operation.
At the
Vietnam-Japan Medical Collaboration seminar to be held on August 26, 2013,
Japanese corporate giants including Fujifilm,
The
seminar will focus on introducing advanced medical treatments for cancer in
Shuzo
Yamamoto, president of Medical Excellence Japan, said
He
said he believed this would contribute to the development of domestic medical
standards and provide a chance to expand exchanges in medical sector between
“We
will hold a seminar with medical professionals from
Manila
Water pours investment in Vietnam
Manila
Water Company under the
Under
the deal which will be signed today, Manila Water, a firm with 15 years
operating in the water infrastructure sector in the
Previously,
Manila Water has cooperated with HCMC Infrastructure Investment Joint Stock
Company (CII) to invest in BOO Thu Duc and Kenh Dong water plants in HCMC.
Khoa,
who serves as investment director of Saigon Water, said that with the money
from the stake transfer, Saigon Water will invest in the Saigon Pleiku water
plant project in
Besides,
Saigon Water will begin construction of the VND170-billion Du Long water
plant project in
In
February, Saigon Water spent around VND100 billion buying a 90% stake in Dai
An BOO Water Drainage Joint Stock Company to operate Saigon Dankia 2 water
plant in Lam Dong Province. This plant’s treatment capacity is 25,000 cubic
meters per day.
After
cooperating with Manila Water, Saigon Water expects to have stronger
financial capability and more experiences in developing water treatment
plants. CII and Manila Water are currently Saigon Water’s two big
shareholders.
Saigon
Infrastructure Real Estate Investment Joint Stock Company (SII), established
in May, 2010, was renamed Saigon Water in March.
In
May, 2011, SII decided to shift to the main business of environmental
infrastructure including wastewater treatment, urban water supply and water
production.
Banks
poised for year-end hiking capital demands
As of
July 30, 2013, banking sector’s credit expanded 5.15 per cent against end of
2012, according to the State Bank. The sector’s full-year credit growth
target was pegged at 12 per cent.
Banks
thereby said they expect they could scale up lending in year-end period to
achieve the year’s projections.
At Ho
Chi Minh City-based Nam A Bank, lending rates to customers with viable
business plans and good finance are ranging from 9-10 per cent, per year.
The
bank’s credit expanded 12 per cent in the year’s first half and Nam A Bank
has proposed the State Bank for easing the bank’s credit growth cap to 30 per
cent to meet firms’ higher capital demands by year-end period.
At
Eximbank, lending rates to export, production and trading areas are trending
downward, even sliding to below 7 per cent per year to good customers.
The
bank reported 5.7 per cent credit growth in the first seven months and will
bolster capital support to firms and individual customers in later months to
reach full-year set target of 12 per cent, according to Eximbank’s general
director Le Hung Dung.
VP
Bank is coming up with diverse concessionary credit packages in favour of
businesses, particularly small and medium-size units.
For
instance, its VND2 trillion ($95.2 million) credit package, going until end
of September 2013, features lending rates from 7-8 per cent, per year which
are 2-3 per cent lower than usual.
VPBank
also roll-outs VND1 trillion ($47.6 million) credit package with 6 per cent,
per year lending rate in the first six months to individual customers for car
purchases. Lending amounts must be at least VND200 million ($9,500).
According
to general director Nguyen Dinh Tung at Ho Chi Minh City-based Orient
Commercial Bank (OCB), the bank’s credit growth surpassed 6 per cent in the
first six months of 2013 and it may apply for higher credit growth in later
part of the year to boost lending. In early 2013, OCB was allocated around 9
per cent credit growth target for this year by the State Bank.
Apart
from NamA Bank and OCB, a number of banks like HD Bank and SeABank also
wanted higher credit growth and their proposals were accepted by the SBV.
Banks also executed cost-saving measures striving to curtail lending rates to
boost credit growth.
Senior
economist Dinh The Hien said low credit growth was inevitable amid
flat-lining property market and sinking consumption.
“Industrial
production will be continually bogged down in difficulties in late 2013, but
it will further receive huge credit flows and begin to revive from mid-next
year. Construction and property would slightly rebound only due to limited
capital. As for trade and services, these sectors would gradually get back on
track in later months of 2013 and enjoy faster growth from next year thanks
to good capital infusion and lower lending rates,” Hien commented.
Bad
debts put dark clouds on bank profits
Local
banks’ recent first-half financial statements showed that scores of banks
eyed rosy business outcomes with profits reaching several hundred billion
dong even when some of them reported negative credit growth during the
period.
The
question was where bank profits came from?
In the
previous years, credit incomes often made up 80-90 per cent of bank profits.
In the face of recent sliding credit growth many banks could still score
upbeat profits thanks to their services’ strong performance.
Ho Chi
Minh City-based Southern Bank witnessed VND189.3 billion ($9 million)
after-tax profits in the first six months of 2013, up five times on-year.
The
bank incomes mainly came from securities investment.
In
2013’s second quarter, state giant VietinBank posted after-tax profits
surging 3.5 times on-year albeit the bank’s credit just expanded 0.37 per
cent only in the first six months.
Its
incomes mainly came from services, in which securities investment brought the
bank over VND90 billion ($4.3 million) in profits.
Another
state giant Vietcombank is in a similar situation. When the bank’s credit
contracted 1.47 per cent in the first six months, the incomes from securities
investment, foreign exchange business and other services saw a robust growth.
In
2013’s second quarter, the bank’s net profit, though sliding 4.8 per cent
on-year, still amounted to VND864 billion ($41 million).
TienPhong
Bank chief executive officer Nguyen Hung said the bank would focus on
boosting services growth in the upcoming time since credit was not its core
competitive advantage.
According
to banking expert Nguyen Tri Hieu, banks bolstering services activities like
currency transfer, guaranteeing and advisory services or import-export
funding are smart moves in current difficult context.
“Spurring
services growth would be the only path for small banks possessing copious
capital sources in current context since they could hardly compete with big
banks in luring depositors in a safe manner,” said Hieu.
Dr.
Cao Si Kiem, member of the National Monetary and Financial Advisory Council,
however, was doubtful of banks’ impressive profits, arguing that several
banks might not make full provisions for their hiking bad debts.
For
instance, despite scoring high profit growth, VietinBank saw its bad debts
doubled compared to end of 2012.
As of
June 30, 2013, the bank’s bad debts were reported at VND7.027 trillion ($334
million), tantamount to 2.1 per cent of its total outstanding loans against
VND4.890 trillion ($232 million) or 1.46 per cent by end of 2012.
Similarly,
the Saigon-Hanoi Commercial Joint Stock Bank (SHB), after more than a year
merging with Habubank, is now saddled with bad debts and sliding profits.
Particularly,
by June 30, 2013 the bank’s bad debts covered 9.04 per cent of its total
outstanding loans with VND3.186 billion ($152 million) facing being lost.
State
Bank of Vietnam’s Monetary Statistics and Forecast Department recent survey
showed that 50 per cent of credit organisations saw profits going down 20-30
per cent in the first six months of 2013, meanwhile 71.4 per cent of them
expected profit upsurges in the second half this year.
Vietnam-Japan
Joint Initiative opens up new opportunities
Japanese
businesses want to invest further in
He said
JETRO
Chief Representative Hirokazu Yamaoka said such growth rate has not yet met
Japanese businesses’ aspirations as they all think that
Takhahashi
added that of foreign-invested projects in
The
action plan of the Vietnam-Japan Joint Initiative aims to promote investment
in the distribution and retail networks, non-banking activities, food safety
and hygiene, processed food exports, privately funded infrastructure, and
automobile production and support industry.
Minister
of Planning and Investment Bui Quang Vinh said the initiative’s fifth phase
will last 18 months from July 2013 to December 2014. It focuses on 13 issues
related to laws and policies, taxation, customs, human resource training,
intellectual property, environment, food safety, banking, services,
infrastructure development, and macroeconomic stablisation. The Vietnamese
Government has taken drastic measures to improve the investment environment
for all concerned parties.
The
Vietnam-Japan Joint Initiative is considered a successful model for
connecting between the state and private sectors. Minister Vinh said the
model has enabled Japanese businesses in particular and the business
community in general to get involved in government policy making.
Japanese
Ambassador to Vietnam Tanizaki Yasuaki said the first four phases of the
initiative have made it possible for both sides to solve many problems of
mutual concern and gradually improve the investment environment in Vietnam.
Japan
has set up 13 working groups to coordinate with relevant Vietnamese agencies
during the fifth phase. Ambassador Yasuaki expressed his hope that any
remaining snags will be ironed out to ensure successful implementation of the
action plan.
The
Vietnam-Japan Joint Initiative was launched in 2003 as a forum for policy
dialogue between Japanese investors and Vietnam’s relevant ministries and
agencies to build an open and transparent investment environment in Vietnam.
85
percent of 286 items mentioned in the action plan have been deployed and
almost completed. The fifth phase of the initiative is a key pillar in
Vietnam’s 2020 industrialisation strategy and its vision to 2030.
Ambassador
Yasuaki Nanizaki reiterated Japan’s commitment to providing practical support
and invaluable technology transfers.
On the
constant growth of the Vietnam-Japan relations, he highlighted Prime Minister
Shinzo Abe’s first overseas trip to Vietnam last October and Japan’s recent
decision to grant US$1 billion in official development assistance (ODA) to
its Southeast Asian partner.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
|
Thứ Ba, 20 tháng 8, 2013
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