Dong hits one and half year high on strong dollar inflows

Dong hits one and half year high on strong dollar inflows

The Vietnamese dong rose to a 1-1/2-year high against the dollar Monday as foreign investment and remittances continued to flow into the country, bankers said.

The dollar was traded on the interbank market at VND15,980, its lowest since June 19, 2006. Commercial banks in Hanoi were also buying dollars from retail consumers at about VND15,980 to VND15,985, down 1.7 percent from a peak of VND16,251 on August 17 last year, bankers said. “Demand for the dong at year-end and the very strong dollar sup-ply from foreign investors are the main factors behind the dollar’s fall,” a banker in Hanoi said. She said clients had started with-drawing dollar deposits to change into dong to avoid foreign exchange losses as they expected the dollar to continue losing value against the dong this year. “It makes sense now to save your money in dong because of the higher interest rates and the falling dollar,” another banker in Hanoi said. Twelve-month dong deposits offer nine percent to 10 percent, twice the interest on dollar deposits of about 4-5 percent, he said. Foreign direct investment, including pledges for new projects, reached around US$20 billion last year while remittances from Vietnamese living overseas were expected at a record $10 billion, state media reported this week. In the interbank market, rates on overnight dong loans from state-run Agribank, Vietcombank and Vietindebank stood at 7.0 percent to 8.0 percent, almost unchanged from last week’s range of 7.0 percent to 8.2 percent. Source: Reuters

STB: Vietnam's Sacombank profit soars, opens China office

Vietnam's Sacombank profit soars, opens China office

Sacombank, Vietnam's sixth-largest bank, said it more than doubled its 2007 profit as loans and deposits expanded strongly amid a fast-growing economy and announced it had opened its first office in China.

Bank loans in Vietnam rose 37 percent last year as the economy grew at nearly 8.5 percent -- its fastest pace in just over a decade, after a boost given by World Trade Organisation membership. Sacombank's 2007 gross profit climbed to 1.45 trillion dong . Sacombank Chairman Dang Van Thanh said last month it aimed to raise gross profit this year to 2.5 trillion dong. Assets of the Ho Chi Minh City-based bank more than doubled to 63.48 trillion dong as deposits increased to 54.04 trillion dong, it said in a statement on Tuesday. But the bank said the unaudited results did not include those of its four subsidiaries dealing with debt management, real estate, stock broking and leasing as well as two joint ventures, SacomInvest and VietFund Management. Sacombank, or Saigon Thuong Tin Commercial Bank, on Tuesday opened an office in Nanning, the capital of China's southern province of Guangxi which borders Vietnam, to profit from fast-growing trade between the two neighbours. Its shares, the first to be listed in communist-ruled Vietnam, gained 0.8 percent to close at 63,000 dong on Tuesday. The bank was valued at $1.74 billion, the second-largest company on the Ho Chi Minh Stock Exchange after Vinamilk . The World Bank's International Finance Corp, Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam. The Vietnam Association of Financial Investors said on Monday it was seeking approval from Prime Minister Nguyen Tan Dung to raise the foreign ownership cap to up to 37 percent in a bid to boost Vietnam's capital markets. Source: Reuters

Three foreign banks to open branches in Vietnam

Three foreign banks to open branches in Vietnam

Taiwan's Taipei Fubon Bank, Industrial Bank of Korea and Commonwealth Bank of Australia would open branches in Vietnam, one of Asia's fastest growing economies.

The State Bank of Vietnam said in a statement seen on Wednesday it would soon license the three banks to open branches, joining around 30 foreign banks already operating nearly 40 branches in the country. The statement on the central bank's Web site (www.sbv.gov.vn) did not say when and where the three banks would open branches. The Industrial Bank of Korea has a representative office in Ho Chi Minh City, Vietnam's commercial and financial centre. The central bank also said it had given initial approval for the establishment of five more domestic joint stock banks, which taking to nine the number of such Vietnamese banks awaiting a licence. It said the five were Energy Bank, Asia Foreign Trade Bank, Vietnam Star Bank, Dong Duong Thuong Tin Bank and Bao Tin Bank. Late last year, the Oil and Gas, Lien Viet, Bao Viet and FPT banks also secured initial approval. Apart from six state-run banks and 35 domestic partly private banks, 35 foreign banks which have a combined 14 percent share of the loan market, six venture banks, four financial leasing ventures, two wholly foreign owned financial leasing firms and 50 representative offices of foreign banks also operate in Vietnam. The country has about 4,000 bank branches, half of them run by state-run Agribank, Vietnam's largest enterprise. A Planning and Investment Ministry official has said Vietnam wanted to limit credit growth to 22-25 percent this year after inflation hit 12.63 percent in December, the highest since December 1995, when the CPI spiked 12.7 percent. The central bank said loans jumped 37 percent last year in an economy that grew 8.48 percent. The government aims for 9 percent growth this year. Source: Reuters