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From August 23rd:
http://www.france24.com/en/20120823-...sits-fraud-acb
REUTERS - A major Vietnamese bank founded by arrested tycoon Nguyen Duc Kien faced a run on deposits on Thursday, witnesses said, but the central bank has injected funds into the banking system and assured jittery residents their money is safe.
Monday’s arrest of Kien, 48, sent shockwaves through the Communist-run country, triggering a 9.2 percent slide in the stock market this week and causing depositors to pull funds from Asia Commercial Bank (ACB), one of Vietnam’s biggest lenders, which Kien helped found in 1994.
Withdrawals began on Tuesday when the arrest was made public. By Thursday, crowds had formed at ACB’s branches in Ho Chi Minh City, Vietnam’s business centre, residents said. At one branch, depositors shoved tables aside to try to reach bank tellers, a witness said.
The central bank said the entire banking sector “will commit to standing ready to provide, funding support to ACB to ensure it meets its obligations for repaying deposits”.
It pumped 13 trillion dong ($624 million) into the banking system on Wednesday and another 4 trillion on Thursday.
Standard Chartered Plc holds a 15 per cent consolidated stake in ACB, according to Louis Taylor, CEO of the London-based lender’s Vietnam unit. Taylor declined to comment on the resignations. Sumitomo Mitsui Banking Corp, a unit of Japan’s second-biggest lender by market value, owns 15 per cent of Eximbank, data compiled by Bloomberg show.
Vietnam’s benchmark stock index dropped 1.8 per cent at the 11:30 am break, the most among 23 gauges in Asia tracked by Bloomberg, as bank shares fell. ACB lost 5 per cent, heading for its lowest close since at least February 2007. Eximbank slid 3.6 per cent, poised for the lowest since December 12.
Outside ACB’s headquarters, two dozen cars lined up and about 70 depositors crowded the transaction office, a witness said, as confidence dwindled in the financial system of what a few years ago was one of world’s hottest emerging markets.
“I have some cash in ACB but since the bank belongs to the same system controlled by the central bank, it does not mean much to withdraw cash from one bank to put it in another, as all in the system face the same risk,” one ACB depositor said in a telephone interview from Ho Chi Minh City.
The bank’s chief executive officer, Ly Xuan Hai, widely believed to be detained by police, had submitted his resignation, ACB said late on Thursday.
He was replaced by Deputy Chief Executive Officer Do Minh Toan, who has been running the bank this week and told state media earlier that depositors took out 5 trillion dong ($240 million) from ACB on Wednesday. As of June 30, the bank’s deposits totalled 145.62 trillion dong ($7 billion), up 2.4 percent from a year earlier, according to the bank.
Kien, a well-connected tycoon and one of Vietnam’s highest-profile bankers, held less than 5 percent of ACB’s stock. The government said he played no part in managing the bank, which is 15 percent owned by British bank Standard Chartered Plc.
Kien is chairman of B&B Investment and Trade Joint Stock Co, ACB Hanoi Investment Joint Stock Co and Asia Hanoi Financial Investment Co, and the alleged violations concerned these firms, the police ministry said.
He was accused of running unlicensed businesses. His three companies were established to invest in real-estate projects while they raised funds and invested the proceeds in bank shares instead, state media said.
“I wouldn’t think we are going to see a lot of contagion,” said Jonathan Pincus, dean of the Fulbright Economics Teaching Program in Ho Chi Minh City and a former Vietnam economic specialist at the United Nations.
“The State Bank acted quickly and provided liquidity immediately,” he added.
The banking sector has been hit by high inflation and rising bad debt stemming from losses at big state firms in particular. At the end of March, 8.6 percent of all loans in Vietnam were bad, the highest in Southeast Asia, central bank data showed.
Pincus and other experts said ACB should weather the crisis but that plenty of other Vietnamese banks remain in difficulty.
“The immediate problems are for those banks that are heavily overextended in the property market and which are owned by one or two families or groups. Those banks, of which there are many, are very vulnerable. But ACB is not one of those,” said Pincus.
Bankers said ACB and several small banks had been borrowing short-term funds on the interbank market to ensure liquidity. The fixing on overnight dong loans eased to 7.14 percent on Thursday after surging to 7.5 percent the previous day from 4 percent at the start of the week, Reuters data showed.
Deputy CEO Toan was quoted in state media as saying the volume of cash withdrawn from ACB was higher on Wednesday than Tuesday. Toan, who is in charge of the bank in the absence of the CEO, said ACB could access up to 46 trillion dong ($2.2 billion) if needed.
It had borrowed 10 trillion dong from the central bank on Aug. 21-22 and could also gradually withdraw 36 trillion dong from the interbank market, Toan said. That is about a third of the total weekly transactions on the interbank dong market of between 110 trillion and 130 trillion dong over the past month.
Kien’s family is ranked fifth among Vietnam’s 30 richest families in terms of stock market holdings, based on a list compiled by online news website VNExpress. He is also deputy chairman of the Vietnam Professional Football Joint Stock Co, which runs Vietnam’s top-tier professional soccer league.
***
http://www.boston.com/news/world/asi...YaJ/story.html
AP September 20, 2012
HANOI, Vietnam (AP) — Three executives at a large Vietnamese bank have resigned amid a deepening probe into a scandal that has shaken investor confidence in the country.
Asia Commercial Bank said late Wednesday it had approved the resignation of chairman Tran Xuan Gia and two deputies.
Tuoi Tre newspaper reported a fourth executive currently at Eximbank had also stepped down because he was at ACB when the scandal occurred.
Vietnam’ crowded banking sector is believed to have bad debts of up to 10 percent of outstanding loans and is one of the greatest risks to a once booming economy that is now slowing. The Communist government has pledged to restructure the sector, but doubts remain whether it has the will to do this.
Last month, ACB’s ex-CEO Ly Xuan Hai and Nguyen Duc Kien, a superwealthy founder of the bank, were arrested for ‘‘improper lending’’, causing a run on the bank and a large drop in the country’s stock market. The arrests triggered speculation of a damaging power struggle with the country’s normally secretive political and economic elite.
ACB said the executives had resigned for approving a decision by Hai to allow staff to withdraw $34 million to deposit in another bank. It gave no more details.
The bank said they have appointed a new chairman and two deputies including a representative of Standard Chartered Bank which owns 15 percent of ACB’s shares.
The changes are aimed at ‘‘consolidating the management strength, enabling ACB to assert its position as a leading joint stock bank in Vietnam,’’ it said.
It’s unclear whether the executives will face criminal charges.
The country’s main bourse dropped 2 percent by midmorning while ACB shares were down by almost 4 percent.
http://www.france24.com/en/20120823-...sits-fraud-acb
REUTERS - A major Vietnamese bank founded by arrested tycoon Nguyen Duc Kien faced a run on deposits on Thursday, witnesses said, but the central bank has injected funds into the banking system and assured jittery residents their money is safe.
Monday’s arrest of Kien, 48, sent shockwaves through the Communist-run country, triggering a 9.2 percent slide in the stock market this week and causing depositors to pull funds from Asia Commercial Bank (ACB), one of Vietnam’s biggest lenders, which Kien helped found in 1994.
Withdrawals began on Tuesday when the arrest was made public. By Thursday, crowds had formed at ACB’s branches in Ho Chi Minh City, Vietnam’s business centre, residents said. At one branch, depositors shoved tables aside to try to reach bank tellers, a witness said.
The central bank said the entire banking sector “will commit to standing ready to provide, funding support to ACB to ensure it meets its obligations for repaying deposits”.
It pumped 13 trillion dong ($624 million) into the banking system on Wednesday and another 4 trillion on Thursday.
Standard Chartered Plc holds a 15 per cent consolidated stake in ACB, according to Louis Taylor, CEO of the London-based lender’s Vietnam unit. Taylor declined to comment on the resignations. Sumitomo Mitsui Banking Corp, a unit of Japan’s second-biggest lender by market value, owns 15 per cent of Eximbank, data compiled by Bloomberg show.
Vietnam’s benchmark stock index dropped 1.8 per cent at the 11:30 am break, the most among 23 gauges in Asia tracked by Bloomberg, as bank shares fell. ACB lost 5 per cent, heading for its lowest close since at least February 2007. Eximbank slid 3.6 per cent, poised for the lowest since December 12.
Outside ACB’s headquarters, two dozen cars lined up and about 70 depositors crowded the transaction office, a witness said, as confidence dwindled in the financial system of what a few years ago was one of world’s hottest emerging markets.
“I have some cash in ACB but since the bank belongs to the same system controlled by the central bank, it does not mean much to withdraw cash from one bank to put it in another, as all in the system face the same risk,” one ACB depositor said in a telephone interview from Ho Chi Minh City.
The bank’s chief executive officer, Ly Xuan Hai, widely believed to be detained by police, had submitted his resignation, ACB said late on Thursday.
He was replaced by Deputy Chief Executive Officer Do Minh Toan, who has been running the bank this week and told state media earlier that depositors took out 5 trillion dong ($240 million) from ACB on Wednesday. As of June 30, the bank’s deposits totalled 145.62 trillion dong ($7 billion), up 2.4 percent from a year earlier, according to the bank.
Kien, a well-connected tycoon and one of Vietnam’s highest-profile bankers, held less than 5 percent of ACB’s stock. The government said he played no part in managing the bank, which is 15 percent owned by British bank Standard Chartered Plc.
Kien is chairman of B&B Investment and Trade Joint Stock Co, ACB Hanoi Investment Joint Stock Co and Asia Hanoi Financial Investment Co, and the alleged violations concerned these firms, the police ministry said.
He was accused of running unlicensed businesses. His three companies were established to invest in real-estate projects while they raised funds and invested the proceeds in bank shares instead, state media said.
“I wouldn’t think we are going to see a lot of contagion,” said Jonathan Pincus, dean of the Fulbright Economics Teaching Program in Ho Chi Minh City and a former Vietnam economic specialist at the United Nations.
“The State Bank acted quickly and provided liquidity immediately,” he added.
The banking sector has been hit by high inflation and rising bad debt stemming from losses at big state firms in particular. At the end of March, 8.6 percent of all loans in Vietnam were bad, the highest in Southeast Asia, central bank data showed.
Pincus and other experts said ACB should weather the crisis but that plenty of other Vietnamese banks remain in difficulty.
“The immediate problems are for those banks that are heavily overextended in the property market and which are owned by one or two families or groups. Those banks, of which there are many, are very vulnerable. But ACB is not one of those,” said Pincus.
Bankers said ACB and several small banks had been borrowing short-term funds on the interbank market to ensure liquidity. The fixing on overnight dong loans eased to 7.14 percent on Thursday after surging to 7.5 percent the previous day from 4 percent at the start of the week, Reuters data showed.
Deputy CEO Toan was quoted in state media as saying the volume of cash withdrawn from ACB was higher on Wednesday than Tuesday. Toan, who is in charge of the bank in the absence of the CEO, said ACB could access up to 46 trillion dong ($2.2 billion) if needed.
It had borrowed 10 trillion dong from the central bank on Aug. 21-22 and could also gradually withdraw 36 trillion dong from the interbank market, Toan said. That is about a third of the total weekly transactions on the interbank dong market of between 110 trillion and 130 trillion dong over the past month.
Kien’s family is ranked fifth among Vietnam’s 30 richest families in terms of stock market holdings, based on a list compiled by online news website VNExpress. He is also deputy chairman of the Vietnam Professional Football Joint Stock Co, which runs Vietnam’s top-tier professional soccer league.
***
http://www.boston.com/news/world/asi...YaJ/story.html
AP September 20, 2012
HANOI, Vietnam (AP) — Three executives at a large Vietnamese bank have resigned amid a deepening probe into a scandal that has shaken investor confidence in the country.
Asia Commercial Bank said late Wednesday it had approved the resignation of chairman Tran Xuan Gia and two deputies.
Tuoi Tre newspaper reported a fourth executive currently at Eximbank had also stepped down because he was at ACB when the scandal occurred.
Vietnam’ crowded banking sector is believed to have bad debts of up to 10 percent of outstanding loans and is one of the greatest risks to a once booming economy that is now slowing. The Communist government has pledged to restructure the sector, but doubts remain whether it has the will to do this.
Last month, ACB’s ex-CEO Ly Xuan Hai and Nguyen Duc Kien, a superwealthy founder of the bank, were arrested for ‘‘improper lending’’, causing a run on the bank and a large drop in the country’s stock market. The arrests triggered speculation of a damaging power struggle with the country’s normally secretive political and economic elite.
ACB said the executives had resigned for approving a decision by Hai to allow staff to withdraw $34 million to deposit in another bank. It gave no more details.
The bank said they have appointed a new chairman and two deputies including a representative of Standard Chartered Bank which owns 15 percent of ACB’s shares.
The changes are aimed at ‘‘consolidating the management strength, enabling ACB to assert its position as a leading joint stock bank in Vietnam,’’ it said.
It’s unclear whether the executives will face criminal charges.
The country’s main bourse dropped 2 percent by midmorning while ACB shares were down by almost 4 percent.
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