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Bloomberg report conflicts with Vietcombank earnings release
Bloomberg has reported that Vietcombank’s profit in 2007 decreased by 27% over 2006. The news shocked many investors as it is contrary to financial information recently provided by Vietcombank.
Bloomberg compared 2007’s profit, which was officially announced several days ago, to that of 2006, provided by Vietcombank’s report to serve its IPO. The report said the bank’s post-tax profit was VND2.9tril in 2006; Vietcombank said post-tax profit in 2007 was VND2.1tril, a 27% decrease.
However, Deputy General Director of Vietcombank Nguyen Thu Ha has denied Bloomberg’s calculations. “This is false information. There must be a mistake,” Mrs. Ha said.
She said Vietcombank’s 2007 pre-tax profit after making a contingency fund was VND3.1tril, while post-tax profit of the same year was over VND2tril.
According to Mrs. Ha, Vietcombank’s 2007 post-tax profit was VND2.1tril, down by 16.8% over 2006, not 27% as Bloomberg reported. Despite the decrease in post-tax profit in 2007, Vietcombank’s profit was still highest among State-owned banks.
In fact, Vietcombank’s post-tax profit decreased in 2007 over 2006 because the bank put more money in their contingency fund (VND1.2tril in 2007 vs. VND170bil in 2006).
Increasing the contingency fund was required by the State Bank of Vietnam which obligates commercial banks to follow international practice in classifying debts and developing contingency funds.
A senior banking expert said there must be a difference in the calculation methods of the different reports on Vietcombank’s profit. The figures would be different if Vietcombank only calculates their profits or sums up the profits of its subsidiaries.
Analysts have called on Vietcombank to provide official financial information. The information provided by Bloomberg has been worrying investors; especially those who need to make decisions on whether to make payment for the shares they successfully registered at the IPO.
VNN
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