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The bank is likened to a ‘sleeping princess’ and is about to wake up from a long sleep?

Share Sacombank like a sleeping princess in the forest, recently got a lot of attention from investors”, Ms. Nguyen Hang Nga – Director of Vietcombank investment fund gave a metaphor when mentioning the stock code STB in the talkshow Money secret recent number 11.

This, according to the fund manager of Vietcombank, also has a reason because in the past, STB could be likened to a “beautiful girl” but no one noticed because she had some problems, possibly scars, and recently she I’m almost done with my problems.

The “spinning nose” named M&A

Saigon – Thuong Tin Commercial Joint Stock Bank (STB – Sacombank) is one of the oldest retail banking brands and has a large individual customer base in the Vietnamese market. This bank conducted IPO in 1996 and went public in 2006, being the first bank to be listed on the stock exchange.

Sacombank was founded by Mr. Dang Van Thanh and used to be one of the “successful” banks in the years 1996 – 2011. This bank was built by Mr. Thanh with a solid foundation, in which the most special one. human values. However, in 2011, storms began to come to Sacombank.

In the fairy tale, the beautiful princess fell into a hundred years of sleep because she was stabbed in the hand by her spinning nose. M&A deals can be likened to a spinning nose that makes Sacombank unconscious.

Decoding Sacombank: The bank is likened to a princess sleeping in the forest and about to wake up after a long sleep?  - Photo 1.

First of all, in 2011, Sacombank fell into a group of large shareholders, causing the “father” of this bank, Mr. Dang Van Thanh, to leave the bank.

In 2012, with mutual cross-ownership, the two parties Sacombank – Eximbank, signed a comprehensive strategic agreement. Accordingly, Eximbank appointed Mr. Pham Huu Phu to administer at Sacombank. But less than 2 years later, Mr. Phu returned to Eximbank and the merger scenario also fell apart.

Some time later, Southern Bank – Southern Bank merged into Sacombank. After that, Eximbank completely cut ties with Sacombank by selling all of its capital of over 8% at Sacombank.

In 2015, Sacombank merged with Phuong Nam bank with a conversion ratio of 1:0.75, entering a difficult period due to the handling of bad debts from Phuong Nam bank.

After merging with Phuong Nam bank, Sacombank had to bear a huge debt. Next, Sacombank had a problem related to a large group of shareholders, Mr. Tram Be.

After winning and becoming the Chairman of Sacombank’s Board of Directors for 2 years, Mr. Tram Be unexpectedly committed to authorize irrevocably and indefinitely for the State Bank to exercise shareholder rights in accordance with the law for all shares. his share and related parties in Phuong Nam (SouthernBank), Sacombank and NH after the merger. The State Bank will appoint people to participate in the operation and administration.

Following that, former president Tram Be and eight former employees of Phuong Nam bank were brought to trial for causing more than VND505 billion in damage to the bank.

After the merger, Sacombank’s profit before tax in 2015 was only 878 billion dong and in 2016 it was 156 billion dong, due to having to spend most of its profit to make provision for bad debts that the bank Phuong Nam brought back after the merger.

Decoding Sacombank: The bank is likened to a princess sleeping in the forest and about to wake up after a long sleep?  - Photo 2.

In 2017, Mr. Duong Cong Minh suddenly became the chairman of Sacombank. To prepare for this deal, Him Lam divested all of its capital from LienVietPostBank – where Mr. Minh used to be Chairman of the Board of Directors.

After taking the “hot” seat at Sacombank, in addition to changing the personnel structure and speeding up the handling of bad debts, Mr. Duong Cong Minh also wanted to change the stock code of Sacombank’s STB listed on HoSE. changed into SCM code and changed the listing to HNX. However, this plan was not approved by shareholders.

Waking up from a long dream

The participation of Him Lam Group and Mr. Duong Cong Minh in restructuring Sacombank is considered to have many advantages, because this bank has a huge amount of bad debts, including many assets secured by real estate. Him Lam is a big real estate group in the market.

The new chairman Duong Cong Minh also admitted that the merger caused Sacombank to have some problems, but the biggest gain was becoming the bank with the largest scale in the shareholding block.

Since 2017, in addition to continuing to focus on expanding retail banking, Sacombank has stepped up the handling of bad debts. This bank is one of the banks with the highest bad debt ratio ever announced. However, Sacombank’s real bad debt data is in special bonds sold to VAMC.

Accordingly, the total amount of bad debts sold to VAMC at the end of 2016 amounted to VND 37,300 billion. Therefore, in fact, the total bad debt of Sacombank recorded in the financial statements is more than VND 50,000 billion, accounting for about 22% of the total outstanding loans of this bank.

The management of Sacombank also estimated that 64 trillion dong of the total value of 75 trillion dong of collateral of 86 trillion dong of bad debt at STB is real estate.

In 2017, under the leadership of Mr. Duong Cong Minh, Sacombank handled more than VND 19,660 billion of bad debts and outstanding assets, of which more than VND 15,000 billion were under the Restructuring Project. In 2021, this bank can handle about VND 10,000 billion of bad debt. Sacombank’s bad debt ratio at the end of 2016 was at 6.68% of total outstanding loans, it will only be 1.35% by 2021.

Decoding Sacombank: The bank is likened to a princess sleeping in the forest and about to wake up after a long sleep?  - Photo 3.

Sacombank’s business results also improved markedly. At the end of 2017 when Mr. Duong Cong Minh became chairman, Sacombank achieved more than 1,492 billion dong of pre-tax profit, 9.6 times higher than 2016. By 2021, this figure has increased to 4,400 billion dong, double 28 times compared to 2016.

Decoding Sacombank: The bank is likened to a princess sleeping in the forest and about to wake up after a long sleep?  - Photo 4.

This bank also strongly improved in business performance, reflected in net profit margin (NIM) in 2020, although not high when compared to competitors, but doubled compared to 2016. 3.3%.

Besides, Sacombank is also very active in increasing fee income to diversify revenue sources for the bank. Fee income accounts for over 20% of STB’s total operating income.

Decoding Sacombank: The bank is likened to a princess sleeping in the forest and about to wake up after a long sleep?  - Photo 5.

In an analysis report earlier this year on the banking industry, SSI securities company assessed that Sacombank’s handling of problematic assets is expected to improve strongly in 2022.

SSI estimates that STB has about VND 30.6 trillion in problem debt as of June 30, 2021, with collateral including 600 million STB shares pledged at VAMC, Phong Phu Industrial Park (auction price) 7.6 trillion VND) and other assets.

SSI expects that the sale of STB shares pledged at VAMC will be carried out in 2022. If successful, this deal can significantly reduce STB’s bad debt burden.

This bank also renegotiated the bancassurance contract with Dai-ichi Life and successfully sold Song Than Industrial Park worth VND2 trillion, bringing in revenue to help speed up the bad debt settlement in 2022.

https://cafebiz.vn/giai-ma-sacombank-nha-bang-duoc-vi-la-nang-cong-chua-ngu-trong-rung-va-sap-thuc-day-sau-giac-ngu- dai-20220316182232371.chn

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