SeaBank Okayed to Provide Factoring Service

The State Bank of Vietnam, or central bank, has given nod to the Southeast Asia Commercial Joint Stock Bank (SeABank) to provide factoring service.

 

The new service will allow the bank to offer its customers, usually the sellers, a credit by re-purchasing accounts receivable from goods sales.

 

Factoring is expected to facilitate SeaBank to diversify banking products and provide utilities for the customers.

 

Since operating in 1994, SeaBank has maintained a stable development, robust growth and profit making, the State Bank said.

 

Factoring service made a debut in Vietnam in 2005.

 

The State Bank issued a new regulation on factoring services for credit institutions in a move to facilitate deferred payment practices. It stipulates the seller should sign a contract with its bank, under which the seller will provide all documents related to the purchase deal, as well as the right to claim debts. The seller will also have to pay an additional fee to the bank to offset possible risks of failure to claim the debts.

 

SeaBank just boosted its chartered capital to VND1 trillion in March 2007 and plans to raise it to VND3 trillion (US$187.5 million) by the end of the year.

 

As of the end of the first quarter, the bank’s gross assets reached VND13 trillion (US$812.5 million), soaring by 28 per cent from the end of 2006. Its deposits increased 25 per cent to VND1.5 trillion (US$93.8 million) and outstanding loans rose 10 per cent to VND1.4 trillion (US$87.5 million). (Investment, New Hanoi)