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Banks join capital financing programme
More banks are injecting preferred capital into domestic enterprises through trade finance and credit finance, which are seen buoys to save thirsty-capital enterprises from capital tension this year.
The Asian Development Bank (ADB) in conjunction with nine Vietnamese commercial banks carried out a Trade Finance Programme (TFP) in order to boost the international trade activities. The programme is designed to benefit exporters and importers in Viet Nam.
Trade finance refers to international transactions. In this financing arrangement, the bank or the importer's institution provides payment for goods imported on behalf of the importer.
The TFP's Director, Steven Beck, said that the programme has been developing rapidly, supporting up to US$2.8 billion in trade activities in 2010 in Asia. Viet Nam was one of the members using the largest capital of the TFP and definitely the usage will be enhanced within this year.
Vietnamese traders expect their trade finance requirement to increase in the next six months, according to this year's HSBC Trade Confidence Index released in the middle of last month. Fifty-two per cent of respondents will use trade finance from banks, while over 34 percent will rely on their own capital to do business. Only 15 per cent of future trade financing obligations are expected to be made through buyers' support and payment terms from suppliers.
HSBC, Citibank and DBS late last month signed a deal arranging a total of $457 million for Vietnam Airlines to purchase eight Airbus A321-231S.
Earlier, HSBC arranged $904 million under Export Credit Agency (ECA) sourced from Sinosure institution, Hermes to finance the Vung Ang No1 thermo power plant of PetroVietnam.
Citibank Viet Nam arranged $200 million of credit for electricity transmission projects of National Power Transmission (NPT) Corp.
OceanBank, a domestically active bank in launching credit contracts late last month, signed a credit agreement of $7 million with Vietnam Airlines for purchasing engines of Airbus A321 aircrafts.
OceanBank earlier co-operated with HSBC to arrange a seven year credit line of VND400 billion ($19.51 million) for Phu Quy wind power plant in the central province of Binh Thuan.
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