Du Ronghai received an urgent phone call from his private banker at Industrial & Commercial Bank of China Ltd. about an investment opportunity promising a 10 percent annual return. Only for the privileged few, he was told. Du, who owns an apparel manufacturer in southern China, said he hopped on a plane the next morning for a four-hour flight from his home city of Harbin. That afternoon, at an ICBC office in Guangzhou, he looked at the sales contract he was required to read in person and invested 3 million yuan ($488,000), his first foray into the high-yield world of shadow banking. The employee kept telling him the product, called a trust, was so good that bank staff were pooling money to buy it, he said. "I knew nothing about it, but the return was very, very tantalizing, and the way they presented it was like if I don’t buy it now, someone else will grab it in seconds," said Du, who at the time, about two years ago, had almost 30 million yuan parked at Beijing-based ICBC … [Read more...] about China banks showing too-connected-to-fail link with shadow loans
Banks offer debt consolidation loans
State Bank chief has full plate
Reducing Vietnam's lending interest rate, stabilising the VND/USD exchange rate and consolidating the bulky system of credit institutions are all high on newly-elected State Bank Governor Nguyen Van Binh's agenda. VIR's Nguyen Hanh talks with banking and financial expert Dr. Nguyen Tri Hieu to find out how Binh can approach these tasks. Bankers and enterprises now have their sights firmly set on the lending interest rate after Binh promised to bring the rates down to 17-19 per cent in September. Can the governor make good on his promise? The promise the new governor made is encouraging, but I think it won't be easy to put the plan into action and achieve the promised results. September is looming and we have only about a month to reduce the interest rate from the current level of 20-21 per cent to 17-19 per cent. For the banks, to change the interest rate structure in such a short period of time is a difficult task. Secondly, gold and the US dollar prices are climbing. I … [Read more...] about State Bank chief has full plate
No easy medicine to cure banking woes
A crisis of bad debt is just one reason why Vietnam is restructuring its banking industry amid domestic and global economic turbulence. McKinsey & Company senior partner Joydeep Sengupta and partner Marco Breu offer their perspective on the challenges facing Vietnam's banking sector. Most of the macroeconomic indicators for the Vietnamese economy have been on a rollercoaster ride in recent years, prompting international ratings agencies to downgrade its credit rating. Once an economy with impressive growth rates and a relatively stable business environment, it is now widely acknowledged as facing multiple challenges in sustaining growth. In 2012, the trade-off between growth and stability has been revisited, and as the pace of growth slowed to more sustainable levels, the economic situation has gradually improved. By the end of this year, GDP growth is expected to top 5 per cent. However, is this the end of the rollercoaster? Or just the calm in the eye of the storm with more … [Read more...] about No easy medicine to cure banking woes
Central bank further tightens monetary policy
Central bank further tightens monetary policy By Thuy Trieu - The Saigon Times Daily Employees at Viet A Commercial Bank assist two customers to make transactions. Vietnam dong rate is expected to stay high in the coming time following the central bank’s decision to raise key rates - Photo: Le Toan HCMC – The State Bank of Vietnam on Friday in an apparent move to further tighten its monetary policy to fight inflation has just decided to raise its key rates effective from May 1. The central bank last week decided to raise the refinancing rate for commercial banks from 13% to 14% per year, discount rate from 12% to 13% per year and the overnight rate from 13% to 14%. The prime rate in Vietnam dong is kept unchanged at 9% per year. This is the fourth time since February 17 the central bank has revised up key interest rates, showing its determination in restraining money supply to curb inflation. In the January-April period, the consumer price index has almost hit 10% … [Read more...] about Central bank further tightens monetary policy
HD Bank becomes the first Vietnamese IPO bank in 2018
The Hanoitimes - 2017 is considered as a successful year for the stock market with VN-Index increased over 40% to nearly 1,000 points. This is one of the main reasons for banks to go public. HD Bank listed more than 980 million shares on the Ho Chi Minh City Stock Exchange (HOSE) on January 5. Before the listing, foreign investors had spent nearly US$ 300 million to own 21.5% of HD Bank’s chartered capital for price of VND 32,000 per share. With the initial offering price of VND 33,000 per share, HD Bank is valued at VND 32.4 trillion (or US$1.43 billion), thus becoming one of 20 largest companies on HOSE. HD Bank became the first commercial bank in Vietnam making IPO this year. This marks Vietnam's first listing of a bank this year. The country's banking sector, which includes state-owned entities, is being pushed to reform and modernize. It has seen progress after some delays. In 2017, 5 other banks have listed their respective shares on the stock market … [Read more...] about HD Bank becomes the first Vietnamese IPO bank in 2018