|
Better future awaits newly merged banks
The merger of three HCM City-based commercial banks was officially approved by their shareholders late last week. This means that the banking sector will soon have a new bank with an old name – the Sai Gon Commercial Bank, or SCB.
The decision to merge the De Nhat Commercial Joint Stock Bank (Ficombank), Viet Nam Tin Nghia Bank (Tinnghia Bank) and Sai Gon Bank (SCB) was based on a voluntary proposal made by the three lenders and on the fact that they were temporarily facing liquidity problems.
The Bank for Investment and Development of Viet Nam (BIDV) will be the official representative for State capital in the new bank.
Banking experts feel such mergers are needed for several small commercial banks to continue their existence. However, the merger has also initiated public debate over whether or not the new bank will have stronger financial potential.
According to a source connected with the merger, the new bank will have assets worth over VND150 trillion (US$7.2 million), a charter capital of over VND10.5 trillion ($504,323) and over 200 branches and transaction offices nationwide. This can be said to be the equivalent of medium-sized banks in the domestic market.
More importantly, the quality of the new bank's capital sources will be ensured because it can receive liquidity support from the central bank via the BIDV which is known to have considerable experience in corporate governance and provision of banking products and services.
Tran Minh Tuan, deputy governor of the State Bank of Viet Nam, also believes that the BIDV's participation in the new bank would help it succeed in business.
The Joint Stock Commercial Bank of Foreign Trade of Viet Nam (Vietcombank) once participated in helping settle liquidity problems facing a weaker bank, the Export-Import Joint Stock Commercial Bank (Eximbank).
Vietcombank's skilled staff made active contributions to assisting Eximbank in corporate management, collection of debts and in ensuring its liquidity. This regular support has put Eximbank in the stable situation that it is in at present.
Likewise, Dr Le Xuan Nghia, vice chairman of the National Financial Advisory Committee, said that thanks to their experience and highly-professional skills, BIDV staff would help the new bank reclaim debts and enable it to recover its liquidity in the shortest time possible.
Once it was more stable, the new bank would have opportunities to tap into other capital sources including foreign investors, he said.
Many other banking experts have made similar comments on the BIDV's important role in helping the new bank improve its liquidity in the near future.
The credibility of this merger can also be seen in the fact that right after the information was released, many foreign investors expressed interest in the event and some of them were planning to co-operate with the new bank.
Take the Australia-based Macquarie Group, for instance. According to local media reports, the firm, which has an asset base of $317 billion, has already signed a strategic co-operation deal with the newly formed bank.
This means that high-quality capital sources would be on hand for the new bank after its merger is complete.
Another advantage the new bank will have is that an official of this Australian firm is said to have already been appointed chairman of the advisory council of Ficombank, TinNghia Bank and SCB. The senior expert will be responsible for assisting the new bank to formulate and carry out new strategies that will improve the new bank's business efficiency. The Australian firm will also have the task of helping the new bank seek strategic partners in order to tap domestic and overseas capital sources and issue shares to the public.
Retail space available
Tenants looking for retail space in HCM City are being offered more choices because of an increase in the number of projects that have come on line recently.
Late last month, the Phu My Hung Corporation put into operation a new commercial centre, the Crescent Mall, in the Phu My Hung New Urban Area in District 7. The VND2.31 trillion ($110 million) project contributes an additional 45,000 square metres of retail and commercial space. Some of the retail sites have been leased at prices ranging from $40 to $60 per square metre. Commercial areas at the Bitexco Finance Towner and Kumho Link also made their debut in the fourth quarter, supplying considerable high-end retail space to the market.
Meanwhile, the Vincom Centre A complex has just begun to offer commercial space in preparation for the official opening of this building next October. The project owner, the Vincom Joint Stock Company under the Vincom Group, has started seeking tenants for the 38,000sq.m retail area as the project's "hardware" has been completed.
Situated in the prime location known as the Eden Quadrangle shaped by the four streets of Dong Khoi, Le Thanh Ton, Nguyen Hue and Le Loi, Vincom Centre A also includes a five-star hotel, Vinpearl Luxury, with some 300 rooms and an underground parking zone covering 25,000sq.m.
According to Knight Frank – leading independent global property consultancy–supply of retail space from projects in HCM City over the next five years will top 1.7 million square metres.
CB Richard Ellis, the world's leading commercial real estate services firm, also reports that by the third quarter of this year, total retail space in Ha Noi was 135,500sq.m but the figure is expected to increase significantly in next months as series of projects are put into operation.
These include the Hang Da Galleria with 6,600sq.m, Keangnam with 97,000sq.m, Savico Mega Mall with 63,400sq.m, and Vincom Centre Long Bien with 45,000sqm.
However, the increase in retail space supply is accompanied by a slump in demand because of people's low purchasing power and belt-tightening measures adopted in response to tough economic times.
Market analysts estimate that the number of people visiting trade centres for purchases has dropped by between 10 and 30 per cent compared with early this year. Consequently, several retail firms have faced bankruptcy, finding themselves unable to even pay their rent.
Faced with the supply- over-demand situation, many retail space owers have cut their rentals.
CBRI's survey says that in the third quarter, retail rentals were 4.3 per cent lower than the same period last year.
Deposit interest rate likely to fall early next year
The deposit interest rate is most likely to fall early next year to 12 per cent or so, given that inflation has been on a downward trend lately, market observers say.
They reckon that the drop in inflation to below 1 per cent a month over the past few months would lead the central bank and the Government to consider slashing deposit rates to 12 per cent within this month.
Experts, however, say that the central bank needs to weigh different factors before deciding to cut the deposit rate ceiling from the current 14 per cent to 12 per cent.
The upsurge in loans in foreign currencies has put high pressure on the foreign exchange rate, especially when borrowers rush to buy US dollar to repay debts that are due.
Therefore, a deposit rate of 12 per cent should merely be an orientation for the next year's monetary policy, not something specific that must be laid down now, the experts argue.
A lower deposit interest rate ceiling will also make it hard for certain banks with liquidity problems to attract funds.
Some experts say that the central bank should remove the deposit interest cap rather than lower the rate. They say that removing the cap will allow small credit institutions to raise deposit rates to entice depositors.
Instead, they suggest that the central bank apply a lending rate ceiling since it would create more benefits for corporate borrowers and the economy as a whole.
vietnamnet
|
