VietNamNet Bridge – The commercial banks, which once rushed to
mobilize gold deposits now have to pay the penalty for their decisions.
If asking bullion gold traders
who are the biggest buyers at this moment, the answer would be “commercial
banks.” Analysts have commented that the “gold game” duration would depend on
the commercial banks’ liquidity.
Pay penalty for the greed?
When the dong deposit interest
rates kept escalating to 20-25 percent per annum, banks found one solution that
could help them reduce the capital mobilization costs: mobilizing gold
deposits, converting for dong for lending.
Bankers believed that even if the
gold price fluctuated by 5-7 percent, the interest rate gap between dong
deposits and gold deposits would be high enough to bring them fat profits.
The bankers could not imagine
that the gold price would increase dramatically by 300 percent, which has
prompted people to sell gold to make profit. Meanwhile, the State Bank of
Vietnam has repeatedly urged commercial banks to gradually stop mobilizing gold
deposits and lending in gold.
As such, it’s now the time for
commercial banks to collect gold on the market to cover their liquidity and pay
gold back to depositors.
An official of the State Bank of
Vietnam has commented that at this moment, when the gold price is sky high, no
one would buy gold except the banks which need gold to pay debts.
Especially, banks have been
hurrying to buy gold recently, since the State Bank has decided that they would
have to stop mobilizing gold deposits on November 25, 2011.
Sources have said that the three
biggest banks, which meet difficulties in implementing the State Bank’s order
to stop gold transactions from November 25, need some 8 tons of gold more.
Of the three banks, the Asia
Commercial Bank’s (ACB) gold position is minus 100,000 taels, or 3.75 tons.
Meanwhile, the figure for Eximbank is 26,000 taels, or 975 kilos, and the
figure for the whole banking system could be 20 tons.
Two questions have been raised
that what will happen when banks rush to buy gold in big quantities within one
month and if it is feasible to collect 20 tons of gold just within a short
time.
Everything has its breaking point
Experts have every reason to
question if banks can collect enough gold just within a short time. In general,
the last months of years are the time to worry about the liquidity.
It is the high production season,
when enterprises need bank loans to organize production for year-end and Tet
sale, and need cash to pay salaries and bonuses to their workers. As such, this
may be an “impossible mission” for banks to both arrange enough cash to satisfy
the high loans demand and to collect gold to pay gold back to depositors.
Sources have said that credit
institutions have bought over 60 tons of gold only over the last six months.
This means that they would need at least two more months to buy the 20 tons of
gold they need.
A banking expert has said that a
lot of commercial banks have incurred big losses from gold deposits.
An analysis report by Vietcombank
Securities Company showed that if having to buy gold in the fourth quarter of
2012, ACB would incur the loss of 200 billion dong. In the first nine months of
the year, the bank’s post tax profit was 896.4 billion dong, down by 57.3
percent in comparison with the same period of the last year, which has been
attributed to the losses form gold mobilization.
Lao Dong
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. Since we are currently changing the platform of www.yourvietnamexpert.com, you may contact us at: sbc.pte@gmail.com, provisionally. Many thanks.
No comments:
Post a Comment