The State Audit of Vietnam (SAV) has found that three state-owed commercial banks declared their 2008 profits lower than the audited figures by hundreds of billion dongs, warning them of low credit quality.
Audited profit of Vietnam JS Commercial Bank for Industry and Trade (CTG), or Vietinbank, is VND795 billion higher than earlier figure reported by the Hanoi-based lender.
Vietcombank and Mekong Housing Development JS Bank (MHB) were found to report their profits VND216 billion and VND6 billion, respectively, lower than the audited ones.
Representatives of these audited banks attributed difference methods of accounting to the gap between pre- and post-audited profit figures.
Vietcombank Chairman Nguyen Hoa Binh was quoted by the newswire as saying that the gap of VND216 billion at his bank was caused by the fact that Vietcombank set aside higher risk provisions than the current regulations.
However, SAV’s figures showed that Vietcombank’s setting aside for risk provisions was inaccurate and SAV requested the bank to cut VND217 billion from this provision.
In addition to inaccurately declared profits, SAV said that credit quality of some banks was risky as their non-performing loan ratio rose higher.
The NPL ratio of Vietcombank increased to 4.6% in 2008 from 3.4% in 2007, and MHB rose to 2.91% in 2008 from 2.05% in 2007.
Vietnam Development Bank (VDB) obtained the overdue investment debt rate at 5.7% and overdue export loan rate at 0.54%, and the figures might be higher if being classified in line with the debt regulations of the State Bank of Vietnam.
VDB’s risk provision fund was not enough to offset the overdue loan amounts. By the end of 2008, its principal debts and overdue interests were high 5.97 times over its risk provisioning fund.
Similar issue was also uncovered at some state-run financial enterprises such as State Capital Investment Corporation (SCIC), Bao Minh Joint Stock Corp, and Vietnam Postal Insurance JS Company. (VnExpress)
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