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In its recently published update report, KBSV (KBSV) expects Sacombank to record an extraordinary income of VND 1,336 billion in 2024 from the sale of a debt related to the Phong Phu Industrial Park, after making full provisions for the VAMC bonds.
Earlier, at the 2024 AGM of Sacombank, the bank’s leadership announced the successful auction of a debt secured by property rights at the Phong Phu Industrial Park project. The leadership of Sacombank said that they had recovered 20% of the total value of the successful auction. The auction winner will make payments according to the progress of the project’s legal completion, with 40% of the total amount expected to be paid in 2024 and the remaining 40% to be paid in 2025.
At the beginning of 2023, Sacombank organized an auction for 18 debts secured by assets at the Phong Phu Industrial Park project. This was the sixth time that Sacombank had attempted to sell this debt, with a starting price of VND 7,934 billion.
According to the bank, the total value of the debts as of December 31, 2021, was VND 16,196 billion, including principal debt of over VND 5,134 billion and accrued interest of over VND 11,061 billion. This debt originated from loans made by SouthernBank during the 2011-2012 period. When SouthernBank merged with Sacombank in 2015, this debt became non-performing and had to be resolved by Sacombank.
As introduced by Sacombank, the Phong Phu Industrial Park project is located on Nguyen Van Linh Street, next to the Phu My Hung urban area, at the intersection of Trinh Quang Nghi and Nguyen Van Linh streets in Binh Chanh district, Ho Chi Minh City. The project covers an area of 134 hectares, including 67 hectares of industrial land and 67 hectares for industrial services (expert housing, supermarkets, and hospitals).
The resolution of this debt has helped Sacombank move closer to its goal of completing its restructuring plan this year. In response to shareholders’ concerns that Sacombank has been achieving its annual profit targets and should distribute dividends to shareholders sooner, Mr. Duong Cong Minh, Chairman of the Board of Directors of Sacombank, explained that due to the ongoing restructuring process, although they have submitted a request to the State Bank of Vietnam to distribute dividends to shareholders, they have not yet been approved. Instead, they have had to focus their resources on addressing post-M&A issues, and will distribute dividends after the restructuring process is complete.
In terms of financial performance, Sacombank reported consolidated pre-tax profit of VND 2,654 billion in the first quarter, up 11.4% year-on-year.
As of March 31, 2024, Sacombank’s total assets were VND 693,535 billion, an increase of 2.8% from the beginning of the year. Customer loans increased by 3.7% to VND 500,408 billion, while customer deposits rose by 4.4% to VND 533,358 billion.
With regard to asset quality, the financial report showed that Sacombank’s non-performing loans increased by 3.8% in the first quarter to VND 11,402 billion. The non-performing loan ratio remained unchanged at 2.28%. Currently, the bank’s bad debt (Group 5) stands at VND 6,282 billion, representing a 28% increase in the first quarter.
Sacombank’s bad debt coverage ratio improved from 69% to 73%.
The special bonds issued by VAMC continued to decrease to VND 15,973 billion (a reduction of VND 460 billion compared to the end of 2023). Of this amount, the bank has made provisions of VND 14,571 billion.
