VietNamNet
Bridge – Big Vietnamese commercial banks
are going to issue international bonds in 2012.
Sacombank’s
Board of Directors has said it was going to submit to the shareholder’s meeting
the plan to issue 200 million dollars’ worth of five-year international bonds.
These would be unconvertible bonds with no mortgaged assets.
Foreign currency capital mobilization going
slowly
Sacombank
plans to issue international bonds in the second or third quarters of 2012 at
the market interest rates to be fixed at the time of issuance, which would be
listed on the Singaporean Stock Exchange.
If the
bank’s bond issuance gets the nod from the government, Sacombank would become
the fourth bank in Vietnam which plans to issue international bonds in 2012.
Prior
to that, Vietcombank revealed the plan to issue one billion dollar worth of
10-year international bonds. ACB also planned to issue 100 million dollars
worth of bonds.
Meanwhile,
Vietinbank alone seeks two billions dollars worth of capital from bond issuance
this year. In early May 2012, Vietinbank became the first Vietnamese bank which
successfully issued 250 million dollars worth of five-year international bonds.
An executive
of Sacombank said the bank needs to issue international bonds after it met
difficulties in mobilizing capital from the domestic market in 2011. By the end
of 2011, Sacombank’s mobilized capital had reached 123,316 billion dong, just
fulfilling 88 percent of the plan.
The
State Bank’s tightened monetary policies led to the low growth rate in the
mobilized capital of the bank in 2011 in comparison with the previous years.
Meanwhile, Sacombank wished to obtain the 16 percent growth rate in the mobilized
capital in comparison with late 2011 to reach 143,500 billion dong.
Vietcombank
showed the same reason when explaining its plan to issue international bonds.
In 2011, the mobilized capital in foreign currencies amounted to 83.77 percent
of the total mobilized capital. However, the volume of capital decreased due to
the regulation on the 2 percent ceiling dollar deposit interest rate.
The
bank also revealed while the foreign currency deposit brought 30 percent of the
total mobilized capital, the foreign currency loans amounted to 32.43 percent
of the total outstanding loans. Meanwhile, the bank needs stable and long term
foreign currency capital; therefore, it needs to seek the capital from foreign
sources.
Not a good thing for the national economy
Experts
have pointed out that it would be better to seek capital from the public than
issuing bonds in the international market. However, banks have no other choice
for now. As they can pay 2 percent at maximum for dollar deposits, they cannot
attract deposits from people.
Dr Le
Tham Duong from the HCM City Banking University has warned that it would not be
a good thing for the national economy if banks rush to borrow money from
foreign sources.
Meanwhile,
Dr Le Dat Chi from the HCM City Economics University has warned that this would
make the plan to ease interest rates become impossible.
In
general, banks issue bonds at the interest rates of 7-8 percent per annum on
average (while they only pay 2 percent for dollar deposits in Vietnam). If
banks convert the capital to be mobilized from the bond issuance into dong and
lend dong to businesses at the interest rates of 13 percent at least, the
interest rates would not go down as expected.
Banks
would not lend at the lower interest rates, because they themselves have to pay
high for the capital from foreign sources. The overly high foreign debts,
together with the trade gap, would put a hard pressure on the dong/dollar
exchange rate.
Dat
Viet
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment