More than 50% of Sacombank's outstanding loans are to SMEs. Why have you targeted this market? Do you think SMEs are the backbone of Vietnam?
Sacombank aims to be the leading retail bank in Vietnam as such SMEs are our major target market. Vietnam, after all, is a developing country with 300,000 registered SMEs û in other words, they represent the backbone of the country. Furthermore with the equitisation of state-owned enterprises, the SME market is set to grow even larger.
Sacombank continuously identifies optimal financial solutions for SMEs. By this we mean we offer preferential interest rates, loans and secured assets ratios, and we prioritise our services for SMEs so they can capture the opportunities.
We hope that our business results will also help strengthen the economy of Vietnam.
How do you offset the risk of non-performing loans, or NPLs?
The State Bank of Vietnam dictates a cap on NPLs and Sacombank follows that regulation closely. Thus the NPL of Sacombank is now about 0.24% of total loans.
The measures that Sacombank takes to control its NPLs are: strengthening our credit policy and the delegation of the lending authority; training our staff in the credit underwriting process; and increasing training on credit evaluation.
Obviously you have to continuously improve the credit audit process and enforce strict policies on loan provisions.
Are you keen to help some of these smaller companies complete IPOs? Or do you think, given the downturn in the Vietnamese equity markets, the way for corporations in Vietnam to grow is to attract private equity investments?
Sacombank aims to help SMEs privatise through advisory services offered by Sacombank Securities (SBS), a member of the Sacombank Financial Group. The advisory services include stock issuance and stock listing advice. Additionally, Sacombank regularly holds seminars to share its experience in corporate governance and equitisation with joint stock company leaders.
We believe that the recent downturn is temporary and that a recovery will come in the near future. The Vietnam stockmarket is clearly experiencing what has already happened in emerging countries in the past.
The stockmarket remains the most effective channel for corporations in Vietnam to source capital for sustainable development.
Sacombank is expanding its network connections into China. Can you tell me a bit about this?
On January 8, 2008, Sacombank opened its first China representative office in the heart of Nanning City in Guangxi Province. Our staff are fluent in Vietnamese and Chinese, and also understand local culture and government regulations. The representative office is geared to provide effective trade advisory services, including investment policy, economic policy, and monetary policy for Chinese enterprises that wish to invest in Vietnam and vice versa.
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