According to the report of the Ministry of Finance to the National Assembly’s Office, state owned economic groups and general corporations have invested their money in many business fields, but the banking sector remains the biggest choice.
The report shows that by the end of 2010, the state owned enterprises (SOEs) had invested 3576 billion dong on securities, 2236 billion dong in the insurance sector, 5379 billion dong in real estate, and injected 495 billion dong in investment funds. Especially, the investment in the banking sector had been the heaviest with 10,128 billion dong.
The same conclusion would also be drawn up if considering the investments of the SOEs in the business fields in the period of 2006-2009. The investment in the banking sector was 3838 billion dong in 2006, then rose 7977 billion dong in 2007, and 11,427 billion dong in 2008 and 8734 billion dong in 2009. And more than 10 trillion dong were injected by the SOEs in the banking sector in 2010.
The increasingly high investments in non-core business fields have raised the worry that the enterprises would meet risks as they spend money on the businesses, where they do not have many experiences. Experts have warned that the overly high investments in other business fields would lead to the less attention to the main business sectors, and generate risks to the whole system of SOEs.
The government has many times requested the SOEs to withdraw their capital from the fields into which they once poured money. However, the big cheeses prove to disagree with the conclusions that their investment deals may face risks, saying that the investments are still bringing fat profits.
Especially, the SOEs prove to be very slow in implementing the capital withdrawal. Analysts have commented that the big guys who are holding banks’ stakes, all keep hesitant to withdraw capital.
Meanwhile, Tran Xuan Hoa, Chair of the Vietnam Coal and Mineral Industries Group (Vinacomin), said that it is necessary to follow a roadmap to withdraw capital from the banking sector, and that the thing cannot be fulfilled overnight.
“We are still waiting for the instructions from the government and the National Assembly about our plan to withdraw capital,” Hoa said.
To date, Vinacomin is still holding 300 billion dong worth of stakes at SHB bank, SHS Securities Company and SHB-VInacomin insurance company.
Sharing the same view, Trinh Cong Loan, a senior executive of the Vietnam Cement Corporation (Vicem), also said that it is not necessary to force economic groups and general corporations to hurriedly to quit the finance and banking sector, and that the withdrawal needs to follow a detailed process in order to avoid negative impacts to banks’ operation.
Declining to make comments about the policy to withdraw capital from the banking sector, but a senior executive of the Vietnam National Petroleum Import-Export Corporation (Petrolimex) said that investing in the banking sector does not always mean “investing in non-core business fields”.
Petrolimex has contributed capital to a joint venture bank with Indian partner. This is really an important investment deal, because this supports Petrolimex’s main business field – importing petroleum products. To date, the bank has been profitable.
Replying to the arguments by SOEs, Tran Hoang Ngan, a member of the National Advisory Council for the Finance and Monetary Policies, has affirmed that it is really a reasonable policy to request SOEs to withdraw capital from non-core business fields. When the stock prices increase and the real estate products sell like hot cakes, the investment deals will bring fat profits to SOEs. However, SOEs may suffer if the stock market keeps lackluster and real estate products remain unsalable.
In fact, the investments in the finance and real estate sectors have become a heavy burden on businesses.
Source: TBKTVN
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