Bank to let loose 60 million share issue

Bank to let loose 60 million share issue

QĐND – Wednesday, December 30, 2009, 21:43 (GMT+7)

Vietnam International Bank has been given permission to issue 60 million shares to existing stockholders to raise its charter capital to 3 trillion VND (157 million USD) from 2.4 trillion VND (126 million USD).

The individual face value of the shares will be 10,000 VND.

FPT Securities will act as consultant for the issuance, which will be traded from February 10.

The Hanoi-based bank on December 25 paid a 13.2 percent dividend for 2009.

In October, the bank announced that it planned to raise its charter capital to 4 trillion VND (210 million USD) by the end of the year. VIB did not explain why it had changed its plans.

Up until the end of the third quarter, VIB earned 496 billion VND ( 20.11 million USD) in pretax profit – twice that of the same period last year. It has also exceeded its revenue plan for the whole year.

Total deposits reached 44 trillion VND (2.3 billion USD), up 38 percent on the same period last year. Total outstanding loans were 25.5 trillion VND ( 1.3 billion USD), up 29 percent on the same period last year.

The bank’s bad debt ratio was under 1.5 percent.

Source: VNA

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World Bank boosts China 2009 growth forecast to 8.4 pct

The World Bank on Wednesday upgraded its 2009 economic growth forecast for China to 8.4 percent on the back of huge public spending but warned stronger domestic demand was needed to ensure a sustainable recovery.

A worker walks past a construction site at the Central Business District of the southern Chinese city of Guangzhou in Guangdong province October 27, 2009.

The new prediction given by the Washington-based lender in its quarterly update marked a sharp jump from its June forecast for 7.2 percent growth.

Economic growth in the Asian giant would “rise somewhat” in 2010, it added.

“In spite of a large drag on growth from exports amidst the global recession, China’s economy continues to grow robustly because of expansionary fiscal and monetary policies,” the bank said in the report.

“Infrastructure investment has been key but consumption has also held up well. More recently, real estate activity has been recovering as well.”

The upgrade by the World Bank follows similar moves by the International Monetary Fund and Asian Development Bank after the rapid turnaround in the world’s third largest economy caught economists somewhat by surprise.

The World Bank said China was “on track” to reach Beijing’s oft-stated goal of eight percent growth this year — seen as vital for job creation and warding off social unrest in the country of 1.3 billion people.

But it warned a “successful rebalancing” of the economy was needed to ensure a sustainable recovery in the medium term.

“Rebalancing and getting more growth out of the domestic economy call for more emphasis on consumption and services and less on investment and industry,” the bank said.

China grew by 8.9 percent in the third quarter — the fastest pace in a year — after expanding by 7.9 percent in the second quarter and 6.1 percent in the first three months, the slowest pace in more than a decade.

The recovery has been driven by a four-trillion-yuan (586-billion-dollar) stimulus package unveiled a year ago and a record 8.67 trillion yuan in bank lending in the first nine months of 2009.

China was expected to grow in 2010 even as public spending slowed, the bank said, as demand for Chinese-made goods overseas picked up.

“In 2010 the composition of growth is likely to change … Exports will probably stop being a drag on growth from end-2009 onwards and real estate investment looks set to be stronger,” the bank said.

“However, government-influenced investment, the key driver of growth this year, is bound to decelerate (and) market based investment is likely to continue to feel negative pressure from the significant spare capacity in many manufacturing sectors.”

“In all, we expect GDP growth to rise somewhat in 2010, with risks evenly balanced.”

The bank said it saw no need yet for macroeconomic policies to be tightened while risks and uncertainties in the global economy remained high.

“Underlying inflation is not a concern for now. A somewhat supportive policy stance is appropriate, and it is particularly important to have flexibility to add or subtract support if needed,” the bank said.

 
 

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ECB rates on hold, experts view bank loan policy

 Eurozone interest rates are set firmly on hold and any signs of change will probably show up first in the European Central Bank‘s exceptional loan support measures, analysts say.

“The ECB will leave interest rates on hold at 1.0 percent at its November policy meeting,” Capital Economics economist Jennifer McKeown said on Friday. Bank policymakers convene on Thursday.

The rate has been at a record low since May and persistent concern over the strength of an anticipated eurozone economic recovery will keep it there for some time, experts say.

European business and consumer confidence is on the rise, having firmed in October for the seventh consecutive month, but ECB president Jean-Claude Trichet has stressed that a recovery would be “uneven.”

The euro’s rise in value against the dollar has stirred up a headwind for exports from eurozone countries, while domestic consumption remains fragile amid fears that unemployment could climb higher in 2010.

A giant symbol of the euro currency outside the European Central Bank in Frankfurt

The US Federal Reserve and the ECB “still harbour doubts about the pace of recovery and expect only lacklustre growth in the medium term,” Commerzbank economists said in a research note.

But the ECB has also warned banks to brace for the end of “enhanced credit support,” which expanded after the US investment bank Lehman Brothers collapsed in September 2008.

ECB governing council member Axel Weber, who is also the German central bank governor, commented last week that dependence on central bank funds was “certainly not a sustainable business model.”

“Banks should prepare for the progressive withdrawal of medicine administered by central banks,” Weber said.

The main feature of ECB support has been the supply of unlimited amounts of cash at its benchmark rate for periods of up to a year, aimed at keeping credit flowing through eurozone banks to the wider economy.

Reaching a peak in June with one-year loans of 442 billion euros (655 billion dollars) — the largest volume of funds ever provided in a single step — the policy has helped bring down interbank lending rates.

But banks have been slow to relay much of the credit to businesses and households, saying that demand has fallen as a result of the global downturn.

In September, eurozone lending to the private sector contracted for the first time on record, though an ECB bank lending survey showed later that banks could begin easing credit standards soon and that demand for home mortgages was firmer.

The economic think tank Ifo said Friday that the credit hurdle in Germany, the eurozone’s largest economy, was slightly lower in October though large firms found it harder than smaller ones to secure loans.

As a first step in what is called an “exit strategy” for unorthodox measures, the ECB could announce that its next 12-month refinancing operation in December could be the last, and/or that it will begin to charge more than 1.0 percent for central bank funds.

But Weber implied that the policy of granting all requests for funds, also an exceptional measure, would likely be continued even after the length of time they are loaned for was cut back towards the previous maximum of three months.

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RoK Bank supports poor students in Hanoi

RoK Bank supports poor students in Hanoi

QĐND – Friday, October 30, 2009, 20:48 (GMT+7)

The Foreign Exchange Bank of the Republic of Korea, on October 29^th, presented scholarships worth total over VND300 million to poor students in Hanoi who have attained good study record. 

As many as 90 poor students from Hanoi National University, the University of National Economy, the University of Science and Technology, Hanoi Conservatory and the Institute of Finance received scholarships worth VND3.5 million each.

It is the fourth time the RoK’s Bank of Foreign Exchange has granted scholarships to needy students in Hanoi with good academic results.

Source: HNM

Translated by Vu Hung

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Japan faces three years of deflation: central bank

Japan’s economy faces three years of deflation as it claws back from its worst slump in decades, the central bank warned Friday, even as it moved to end some of its recession-busting measures.

Customers dressed in traditional kimonos look at Hello Kitty character goods as they look at the world’s largest Sanrio character goods shop upon its opening in Tokyo on October 29. (AFP Photo)

The Bank of Japan painted a slightly more optimistic picture of the outlook for economic growth in a twice-yearly report, but warned that prices would keep falling until at least the year to March 2012.

“Japan’s economy has started to pick up, and in the second half of fiscal 2009 it is likely to improve gradually on the back of improvements in overseas economies as well as the effects of economic policy measures,” it said.

But the pace of recovery is likely to remain “moderate” until late 2010 because it will take time for the global economy to rebound and the effect of pump-priming stimulus measures will wane, it added.

The world’s second-largest economy is set to shrink 3.2 percent in the current financial year to March 2010 before rebounding by 1.2 percent next year and 2.1 percent the following year, the Bank of Japan predicted.

Consumer prices are expected to fall 1.5 percent in the current financial year, followed by a further decline of 0.8 percent next year and 0.4 percent the following year, the BoJ said.

The Bank of Japan said it was a “critical issue” whether the decline in prices results in a deflationary spiral that depresses economic activity.

But with the pace of deflation expected to gradually slow, that appears unlikely to happen, it added.

Earlier in the day the central bank announced that it would end some of its emergency measures to fight the financial crisis at the end of the year as Asia’s biggest economy emerges from a deep recession.

The BoJ has been tackling the credit crunch with super-low lending rates and other steps to support struggling companies, such as purchases of corporate debt, which will finish at the end of December.

Japan was stuck in a deflationary spiral for years after its asset price bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of further price drops.

The current global economic downturn and a slump in commodity costs pushed the country back into the deflationary doldrums.

Core consumer prices have now fallen year-on-year for the past seven months, although the pace of decline eased to 2.3 percent in September, after a record 2.4 percent slump in August, the government reported Friday.

 

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Deutsche Bank reveals crisis-beating results

The entrance of the German bank IKB Deutsche Industriebank AG in Berlin (AFP photo)

FRANKFURT (AFP) – Deutsche Bank, the biggest German bank, presented crisis-beating results on Thursday, cutting provisions against bad loans and reporting its third big net profit in a row.

Net profit for the third quarter was 1.4 billion euros, the third in a row to exceed one billion euros (1.47 billion dollars).

“All our business segments were profitable in the quarter,” chairman Josef Ackermann was quoted by a statement as saying.

A strong contribution came from the Corporate Banking and Securities division which showed earnings of 4.4 billion euros, four times the amount posted in the third quarter of 2008.

Provisions against bad loans, an indicator of how the bank views the near-term future, were cut almost in half to 544 million euros from the previous three-month period.

Provisions, a critical variable factor in bank results, represent money put aside in case of problems. They reduce declarable profit, but may boost profits later if all the problems do not arise.

Deutsche Bank had booked one billion euros in provisions against bad loans in the second quarter of the year.

“The low risk provisions figure indicates that the quality of Deutsche Bank?s loan portfolio is better than expected,” Merck Finck analyst Konrad Becker said.

Analysts polled by Dow Jones Newswires had expected the sum to come to 689 million euros this time around.

Compared with the third quarter of 2008 however, provisions were more than double the 236 million euros reported by the bank.

And on a nine-month basis, they came to 2.1 billion euros, compared with 485 million in the same period in 2008.

German banks in general are bracing for losses from bad loans, which has made them wary of expanding credit to businesses and households.

But Deutsche Bank finance director Stefan Krause told a telephone news conference: “We don’t foresee an additional increase in provisions” next year.

Meanwhile, Deutsche Bank also confirmed its third-quarter net profit of 1.4 billion euros, the third quarterly figure in a row exceeding a billion euros.

“Deutsche Bank has proved its resilience in an exceptionally tough environment, and has indeed emerged stronger from the crisis,” Ackermann said.

Investors seemed to agree, and shares in the bank gained 1.71 percent to 49.73 euros in morning trading on the Frankfurt stock exchange, while the DAX index of leading shares was 0.07 percent higher overall.

On Wednesday, Deutsche Bank said it would buy Sal. Oppenheim, a Luxembourg-based private banking group, for 1.0 billion euros, a price deemed interesting by the markets.

Deutsche Bank said it would not have to increase its capital to finance the deal, which it intended to pay for with its own shares.

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State Bank holds prime rate at 7%

HA NOI — The prime rate will remain unchanged at 7 per cent in October, the State Bank of Viet Nam said in a statement released yesterday.

The prime rate has remained unchanged since February, when the bank cut it from 8.25 per cent to 7 per cent – the lowest rate since 2004.

Under Decision No2232/QD-NHNN, which will take effect from October 1, discount and refinancing rates for credit organisations will be kept on hold at 5 per cent and 7 per cent, respectively.

Also from October 1, overnight inter-bank rates will remain at 7 per cent.

The interest rate on dong-denominated loans would be capped at 10.5 per cent per year, although negotiable lending rates applicable for personal and credit card loans could range between 12-16.5 per cent.

According to the bank’s statistics, in the past week, banks were offering average lending rates at 9.5-10 per cent on short-term loans in dong, 10-10.5 per cent on medium and long-term loans, and 12-16.5 per cent on negotiable loans.

Ho Huu Hanh, director of the State Bank’s branch in HCM City, said outstanding loans of commercial banks in HCM City alone in the first three quarters of the year reached VND648 trillion (US$36.3 billion), up roughly 33.6 per cent year-on-year.

Deposits of commercial banks in HCM City also surged 32.6 per cent over the period. However, most of the deposits were short-term ones while medium and long-term loans accounted for 42 per cent of the total, Hanh said.

Some increases

Though commercial banks had recently agreed not to continue raising interest rates for dong deposits, the State Bank reported a number of commercial banks including Sai Gon Joint-Stock Commercial Bank still increased the mobilising rates in dong by 0.05-0.2 percentage points per year.

The State Bank also reported that the average interest rates in dong in the inter-bank market in the past week were on a slight upward trend for most terms, except that the rates for one-month and 12-month terms slightly decreased. The maximum increase was 1.99 percentage points per year for the 3-month term.

In the past week, the total amount of transactions in the inter-bank market reached about VND67.6 trillion ($3.8 billion). —

Source: vietnamnews.vnagency.com.vn

Bank selects VeriSign for online banking security

Ha Noi — The Bank for Investment and Development of Viet Nam (BIDV) has selected VeriSign Extended Validation SSL Certificates to protect customers’ high-value banking transactions from online security threats.

“Our position and reputation is the driving force behind our internet banking strategy, with security as a critical component,” Bui Thanh Hoai of the bank’s Information Security Department said.

“VeriSign is a highly reputable security brand, and we are confident its EV SSL Certificates are the right solution to ensure our customers feel safe using our online services,” he said.

“We are seeing more Vietnamese banks offering better online services to customers, with security top of mind as they recognise its importance in helping to encourage customers to use this relatively new channel,” Armando Dacal, director of Authentication, VeriSign Asia Pacific, said.

“EV SSL offers banks a visual tool that helps educate customers and takes the guesswork out of figuring out a website’s authenticity.”

BIDV is one of the country’s largest State-owned commercial banks, providing a range of currency, credit, banking and non-banking services.

It also funds projects using sources from domestic and international financial institutions, leading the way in development investment and project financing. —

Source: vietnamnews.vnagency.com.vn

Social bank gives loans to Gia Lai students

Source: vietnamnews.vnagency.com.vn

China link to lift bank efficiency

HA NOI — An Binh Bank (ABBank) and the HCM City branch of Bank of China signed a co-operation agreement on Tuesday in a bid to enhance their operations in the two markets.

Deputy Director General Pham Quoc Thanh of ABBank said there were many promising fields for co-operation between the two banks, including payment methods of telegraphic transfer, letter of credit and documents against payment, direct money payments and money transfers between the two nations.

Through the co-ordination, ABBank can take full advantage of the Chinese bank’s payment systems, which spread throughout China and other nations, for quick transactions. In addition, ABBank’s clients can transfer money directly to partners in China without transferring through a third banking agency. The Chinese bank can also capitalise on ABBank payment systems in Viet Nam for quick transactions.

ABBank was established 15 years ago. Currently the State-run Electricity of Viet Nam, with a 27 per cent stake, and Malaysia’s biggest bank, Maybank, with a 15 per cent, are the bank’s two primary stakeholders.

The Vietnamese bank has a total charter capital of VND2.7 trillion (US$152 million) with 70 agents nationwide. Its revenue and profit retained tripling growth over the past two years.

Bank of China has 100 years of experience in the banking sector with 16,000 branches in the mainland and 79 at financial hubs around the world. It is the first Chinese bank to expand its services outside China. It currently ranks third among the largest global banks in terms of market capitalisation size. —

Source: vietnamnews.vnagency.com.vn