MB Bank has been one of the leading domestic credit institutions for Novaland and Trung Nam Group, providing long-term loans and investing significantly in their bonds. As a result, MB’s leadership has faced questions from shareholders about repayment and liquidity risks associated with these large borrowers at recent annual meetings.
At MB’s business update conference on August 5, 2024, Mr. Luu Trung Thai, Chairman of the Board of Directors, addressed shareholders’ concerns regarding loans to Novaland, Trung Nam, and Sun Group.
Mr. Thai shared that Trung Nam Group’s debt with MB has decreased by VND 2,000 billion this year. Their loan portfolio primarily consists of solar power projects that are operating as planned, generating sufficient cash flow to ensure timely debt service.
He assured that MB does not consider Trung Nam Group’s loans as non-performing and that the projects financed by the bank are performing well, with adequate capacity for debt repayment.
Similarly, Novaland’s debt with MB has decreased by an additional VND 1,500 billion this year. According to Mr. Thai, their loans are not in a dangerous state, contrary to some investors’ concerns. MB has disbursed funds for three Novaland projects, which are progressing well. The project in Vung Tau is fully operational and in the sales process, while the project in Phan Thiet has no legal entanglements and is undergoing land valuation as per the new Land Law.
Regarding the Aqua City project in Dong Nai, the bank is closely monitoring and updating legal procedures. Information received by MB from Novaland and related parties indicates that the government is actively involved in resolving legal issues to unfreeze the real estate sector.
Mr. Thai expressed confidence in Novaland’s debt repayment capabilities for this year. He added that they expect to finalize the business plans and documentation for the first two projects next year.
Regarding Sun Group, MB does not face challenges in collateral asset management or debt repayment. The bank is primarily focused on Sun Group’s tourism development projects, with limited disbursements for their real estate projects.
“MB has consistently limited its investment exposure to these four companies over the years. Our collateral assets typically exceed the loan amount threefold, providing ample security for these loans,” emphasized Mr. Thai.
In addition to addressing concerns about the four companies’ loans, Mr. Thai also discussed the mandatory bank transfer process. MB has submitted its proposal to the State Bank of Vietnam, which is currently reporting to the government. The project is expected to be approved this year and implemented subsequently.
MB Group’s financial performance for the first half of the year showed a nearly 5% increase in total assets compared to 2023, reaching VND 988,605 billion. Consolidated pre-tax profit reached VND 13,428 billion, a 5.4% increase year-on-year, while the bank’s pre-tax profit stood at VND 13,168 billion, a 10.2% increase compared to the same period last year. Customer lending increased by 10.3% year-on-year, and MB maintained its efficiency and safety indices, with ROA at approximately 2.33% and ROE at nearly 23.17%.
For 2024, MB aims to serve 30 million customers based on standardized IT platforms. In the first half of the year, they acquired 1.8 million new customers, bringing the total number of served customers to over 28 million.
MB’s targets for the end of 2024 include a 6-8% increase in consolidated pre-tax profit compared to 2023, estimated at VND 27,800-28,400 billion, and total assets surpassing VND 1 quadrillion.
Novaland reports over VND 1,600 billion in profit for Q4/2023, bond debt reduced by VND 6,000 billion in one year.
In 2023, Novaland achieved a profit of over 800 billion VND, in contrast to the first half of the year when the company incurred a loss of over 1,000 billion VND.
