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SCB books record VND 511,262 trillion in customer deposits
According to the Investigation Conclusion of the police agency, the accounting system of SCB Bank shows the total amount of SCB Bank’s funds raised from individuals, and borrowed from other organizations as of October 17, 2022 (the date of initiating a case of violation of banking operation regulations) is VND 673,586 trillion, including: VND 511,262 trillion in customer deposits; VND 76,845 trillion in the issuance of valued papers; VND 66,030 trillion borrowed from the SBV; VND 12,693 trillion in deposits from other credit institutions and VND 6,756 trillion borrowed from other credit institutions.
The owner’s equity of SCB Bank as of October 17, 2022 recorded on the books is VND 21,036 trillion (including SCB Bank’s Capital, reserves as required, Exchange rate differences, and Undistributed profits).
The amounts raised and owner’s equity mentioned above exist in the following forms:
First, existing tangible assets amount to VND 45,188 trillion (including: Cash fund balance, VND 8,568 trillion; Deposits with SBV and other credit institutions, VND 20,759 trillion; Investments in subsidiaries and other long-term investments, VND 1,113 trillion; Fixed assets, VND 5,328 trillion; Purchase of Government bonds, local government securities, VND 9,202 trillion; Purchase of debt securities, equity securities issued by domestic credit institutions, VND 218 trillion).
Second, receivables related to credits, including unsecured loans (overdrafts, credit cards) or loans secured by assets, mortgages at SCB Bank, amount to VND 556,359 trillion (detailed as follows: Loans to customers (net of used provisions): VND 390,316 trillion; Special bonds issued by VAMC: VND 58,679 trillion; Unreceived amount from delinquent debt sales: VND 69,576 trillion; Delinquent bond sales: VND 1,022 trillion; Receipt of substitute assets for debt repayment: VND 32,832 trillion; UPAS L/C receivables: VND 3,901 trillion; Delinquent asset sales: VND 33 trillion).
Third, other receivables, including interest, fees receivable from customers; Derived financial instruments and financial assets; Transfer amount of Deposit certificates on October 7 + 8, 2022; Other receivables and other assets are VND 135,173 trillion. Of which, receivables from interest, fees receivable from the group 1 loans (or equivalent) is VND 125,688 trillion (SCB Bank has not received).
Fourth, provision for contingencies, depreciation of fixed assets: These reserves have been set aside, recognized to be ready to offset losses for difficult-to-collect debts, accumulate reinvestment capital for fixed assets (reduce the amount receivables related to credit losses and existing assets on the books that may be affected when losses and assets occur) in accordance with the accounting instructions of the Ministry of Finance and the SBV. The amount of these reserves is VND 23,300 trillion.
The total capital sources of SCB Bank according to the accounting books as of October 17, 2022 is VND 713,420 trillion (including raised amount, owner’s equity and SCB Bank’s liabilities, but not yet paid such as interest, fees payable; other payables and debts are VND 18,798 trillion).
SCB assets are revalued at VND 295,940 trillion
Also according to the Investigation Conclusion of the police agency, to conduct a review report for special purposes when credit institutions are subject to special control. Accordingly, all collateral assets of loans with outstanding balances over VND 50 billion for corporate customers and over VND 10 billion for individual customers must be revalued as required by the SBV when the credit institution is subject to special control; and all collateral assets of receivables from debt sale contracts and real estates received for offsetting borrowings must be revalued by the organization with the function of Appraisal. On January 3, 2023, SCB Bank signed a contract to hire Hoang Quan Appraisal Co., Ltd. (abbr. Hoang Quan Appraisal) to revalue the assets of SCB Bank as of September 30, 2022.
As a result, Hoang Quan Appraisal Company determined the value of SCB Bank’s assets to be VND 295,940 trillion. In which: SCB Bank’s fixed assets is VND 5,946 trillion; Guarantee assets of outstanding loans (including sold debts to VAMC, sold delinquent debts, assets received for offsetting borrowings) is VND 289,994 trillion.
Audit determines that SCB Bank has negative owner’s equity of VND 443,769 trillion
After the Ministry of Public Security’s Investigative Agency initiated a case of “Property appropriation fraud” at VTP Group on October 8, 2022, on October 8, 2022, the Governor of the SBV issued Decision No. 61/QD-NHNN on special control over SCB Bank. In accordance with the provisions of Article 147 of the Law on Credit Institutions amended No. 17/2017/QH14: “The special control board requires credit institutions subject to special control to hire an independent audit firm to review, assess the financial situation, determine the true value of charter capital and reserve funds with specific contents as required by the special control board”; based on the SBV’s guidance in Official Dispatch No. 933/NHNN- TTGSNH on October 31, 2022 regarding the hiring of an Independent audit firm to conduct an overall assessment of the actual status of SCB Bank; based on the Special Audit service supply contract of SCB as of September 30, 2022. After the process, on May 31, 2023, KPMG Audit Company Branch in Ho Chi Minh City issued an independent audit report: Review report, financial assessment, determination of the real equity capital and reserve funds of SCB Bank and its Subsidiaries as of September 30, 2022. In which, the audit result, determining that SCB Bank has negative owner’s equity of VND 443,769 trillion, cumulative losses of VND 464,547 trillion.
