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Foreign lenders rush to raise registered capital

In Uncategorized on January 8, 2011 at 4:26 am

While local lenders gained a one-year extension for the deadline to raise their registered capital, foreign-owned banks are on a rush to increase the capital in accordance with the Law on Credit Institutions.

A foreigner waits outside an ATM booth in Ho Chi Minh City (Photo:Minh Tri)

Prime Minister Nguyen Tan Dung has approved the proposal requiring local lenders to raise registered capital levels to VND3 trillion (US$153.9 million), by Dec. 31, 2011, the State Bank of Vietnam said on its website last week.

Commercial lenders took a breath of relief on the fact that the central bank extending the deadline to raise registered capital by one year to ease pressure on banks having difficulty meeting higher requirements.

Foreign-owned banks, meanwhile, are in a race to either reduce the outstanding credit or add more capital in an attempt to meet the new requirement, experts said.

According to the Law on Credit Institution, foreign banks are not allowed to offer a loan which is worth 15 percent higher than its registered capital.

A Vietnam branch of a foreign bank said in spite of its registered capital of $15 million only, it could support projects worth $50 million thanks to the mother bank’s large capital.

But according to the requirement of raising registered capital levels, they can loan around $1-2 million only.

The State Bank of Vietnam early this week granted permissions to three foreign lenders to raise their capital.

Among those banks are Taiwan-based Hua Nan Commercial Bank increasing its registered capital to $65 million from $15 million, Taiwan-based Chinatrust Commerical Bank raising to $50 million from $15 million and Japan’s Mizuho Corporate Bank to $133.5 million from $15 million.

An official of Korea Exchange Bank said the bank will surely have to raise capital as 60 percent of its clients borrowed more than $4 million for each.

Financial experts said foreign lenders with high foreign currency liquidity have an edge over local banks. Therefore, asking them to raise capital will prompt to a shortage of foreign currency, the expert warned.

“Borrowers struggling to get foreign currency loans from foreign banks will switch to local lenders, pilling up pressures on the country’s foreign currency supply,” an economist said.

“The National Financial Supervisory Commission proposed the government to set up credit limits for foreign banks, instead of their branches in Vietnam,” said Dr. Le Xuan Nghia, vice chairman of the commission.

Statistics show Vietnam has 71 foreign credit institutions with 48 representative offices. Their total asset this year reaches more than VND420 trillion, increasing 30.8 percent year-on-year and making out of 11.25 percent of the banking system’s total asset.

They mobilized nearly VND364 trillion, a year-on-year increase of 33.8 percent, and loaned more than VND230 trillion in the first ten months of the year.

Source: SGGP

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Deadline for banks to raise capital pushed back a year

In Uncategorized on December 16, 2010 at 10:02 am

Prime Minister Nguyen Tan Dung has accepted a proposal from the State Bank of Vietnam to extend the deadline for banks to raise their chartered capital to VND3 trillion (US$141.7 million) by one year to December 31, 2011, said the bank on December 14.

Transaction conducted at an Asia Commercial Bank branch in Ho Chi Minh City.

The proposal was sent to the Government when it was found that commercial banks faced a looming December 31 deadline to meet stricter minimum capital requirements.

Earlier, the central bank had been adamant that if they failed to meet the deadline, banks would face closure, or be forced into mergers with other institutions. The bank said that the deadline was ‘hard-and-fast’ as the banks had had four years to prepare for the capital increase.

The Government issued Decree 141/206/NĐ dated on November 22, 2006, requiring banks to raise their chartered capital to at least VND3 trillion by December 31, 2010.

The Decree was aimed at eliminating any weak banks and strengthening the financial capacity and security of the banking system.

The banking system has quickly developed during the past years of renovation. However, most of banks are small-sized and may be vulnerable to the ups and downs of the market.

Additionally, objective reasons like the global financial crisis and economic downturn have prevented foreign partners from pouring money in the banking system and the Vietnamese banks themselves from raising capital through issuing shares.

Besides, the Government has required the State-owned enterprises to focus on their main business lines, so they have withdrawn money from banks, causing difficulties for the banks.

By the end of October, all 22 commercial banks not yet in compliance had received the Central Bank’s approval to increase registered capital from an average of nearly VND1.6 trillion ($75.57 million) to an average of VND3.5 trillion ($165.32 million).

Eleven of these banks had received the State Securities Commission approval to raise additional funds by offering shares. However, because of the gloomy state of the market during the last several months, these plans were derailed.

The State Bank previously extended deadlines for commercial banks to meet higher capital requirements. Commercial banks were required by law to registered capital of at least VND1 trillion (US$47.23 million) by the end of 2008, but only 28 banks had met the requirement by the deadline. Another 10 managed to meet it only as late as the end of 2009, with the central bank granting permission for delaying the compliance.

Source: SGGP

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Charity music performance to raise money for the poor

In Uncategorized on December 16, 2010 at 9:36 am

A charity music performance to raise money for the poor in the upcoming lunar New Year holiday (Tet) will take place at the Ho Chi Minh City Opera House on December 10.

Singer My Tam will take part in the concert.

The concert is jointly organized by the Sai Gon Giai Phong (SGGP) Newspaper and Ho Chi Minh City Television.

Popular singers will include Anh Tuyet, My Tam, Quang Linh, Nguyen Phi Hung, Bonnuer Trinh, Dong Quan, cai luong actress Que Tran and actor Ly Hung.

In addition, on this occasion, the SGGP Newspaper will launch a fundraising program for the disadvantaged people so that they too can enjoy a happy Tet holiday. The organizes would like people to donate money for this worthy cause, so that we can help the poor.

Source: SGGP

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Banks get extra year to raise charter capital

In Uncategorized on December 16, 2010 at 9:32 am

Banks get extra year to raise charter capital

QĐND – Wednesday, December 15, 2010, 21:6 (GMT+7)

Commercial banks have one more year to comply with stricter new minimum capital requirements.

The Prime Minister on Dec.4 set a new deadline of December 31, 2011, for banks to comply with the requirement that they maintain a minimum charter capital of 3 trillion VND (141.71 million USD).

He has instructed the State Bank of Vietnam to work with related agencies to amend Decree No 141, which sets the deadline at the end of this month.

The State Bank had earlier vowed that the deadline was hard-and-fast, since banks had had four years to prepare for compliance, and warned that banks failing to meet the deadline would face closure or forced merger or acquisition.

However, the process of increasing charter capital had been complicated for many banks by the global financial crisis, the withdrawal of investment by State shareholders, and a gloomy domestic securities market, said the head of the State Bank’s supervisory and inspection department, Duong Quoc Anh.

“The fact that the Government has discouraged State-owned economic groups from investing in non-core business lines and instructed these groups to revoke such investments has caused big trouble for a number of financial institutions,” Anh wrote on the State Bank website.

State-owned garment maker Vinatex, for instance, recently sold an 11-percent interest in Navibank, one of the banks unable to meet the new requirements.

In prior proposals to the Government, the central bank had insisted on the higher charter capital requirements in order to improve the security and capacity of the nation’s banking system.

By the end of October, 22 commercial banks not yet in compliance had received State Bank approval to increase registered capital from an average of nearly 1.6 trillion VND (75.57 million USD) to an average of 3.5 trillion VND (165.32 million USD). Eleven of these banks had received State Securities Commission approval to raise additional funds by offering shares.

The State Bank has previously extended deadlines for commercial banks to meet higher capital requirements. Commercial banks were required by law to register capital of at least 1 trillion VND(52 million USD) by the end of 2008, but only 28 banks had met the requirement by the deadline. Another 10 managed to meet it only as late as the end of 2009, with the central bank granting permission for the delayed compliance.

Source: VNA/ Photo: LDO

Source: QDND

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Overseas Vietnamese stars raise public awareness of traffic safety

In Uncategorized on November 24, 2010 at 6:20 am

Overseas Vietnamese stars raise public awareness of traffic safety

QĐND – Tuesday, November 23, 2010, 20:54 (GMT+7)

Movie star Kathy Uyen and Australian Idol Thanh Bui were chosen as Goodwill Ambassadors for the public awareness campaign launched by the Asia Injury Prevention Foundation (AIP Foundation) in coordination with the HCM City Traffic Safety Committee.

For the first time, Vietnam has joined the event together with more than 100 other nations to remember road accident victims and share the suffering of the injured. The event also helps raise public awareness of road accident deaths and injuries in hopes preventing more road injuries and fatalities.

In 1993, the Road Peace initiated the World Day of Remembrance for Road Traffic Accident Victims and on 27 October, 2005, the United Nations endorsed it as a global day to be observed on the third Sunday in November every year. This year’s event was celebrated on Sunday 21, November.

Kathy Uyen and Thanh Bui will be involved in many activities including visiting road accident victims, meeting with government officials to come up with solutions to prevent road accidents, and raising public awareness of traffic safety via the mass media.

Source: VOV

Source: QDND

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Miss Earth 2010 contestants raise awareness on environmental protection

In Uncategorized on November 24, 2010 at 4:53 am

Miss Earth 2010 contestants joined in environmental protection activities in the ancient town of Hoi An in the central province of Quang Nam on November 22.

Miss Earth 2010 contestants join a bike parade in Hoi An Ancient Town on Nov 22, 2010 (Photo: Vnexpress)

The activities included the “Earth Hour and Hoi An ancient town” program; a bicycle parade; and an exchange featuring music performances, traditional festivals, folk games and more between beauties and local residents and visitors at the An Hoi statue garden.

The beauty queens also gave gifts and medicines to disadvantaged children in Quang Nam Orphan Education Center and the Hoi An Red Cross.

Mr, Nguyen Cong Khe, chairman of the Thanh Nien Media Corporation donated VND500 million (US$25,000) to a fund for poor people in Quang Nam.