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Vietnam’s Eximbank chairman squashes arrest rumor

Wednesday, August 19, 2015, 11:06 GMT+7
Vietnam’s Eximbank chairman squashes arrest rumor
File photo of Vietnam's Eximbank chairman Le Hung Dung (L)

The chairman of the Vietnam Export Import Commercial Joint Stock Bank (Eximbank) scotched on Tuesday rumors that he had been arrested, whereas the lender also officially rejected allegations of unhealthy operations.

>> An audio version of the story is available here

Rumors of the arrest of Eximbank chairman Le Hung Dung began circulating on the Vietnamese stock market and affected the lender’s stock during the morning session.

But Dung said that such rumors are “baseless and malicious,” as he spoke to Tuoi Tre (Youth) newspaper later the same day.

The State Bank of Vietnam, the country’s central bank, also confirmed that Dung was not being held.

Also on Tuesday, Eximbank dismissed rumors that it has been placed under special supervision by the central bank.

“It’s groundless to say that Eximbank was put under special supervision,” Eximbank CEO Pham Huu Phu told Tuoi Tre.

Phu said results of the SBV’s inspection at Eximbank will soon be released, adding there is no likelihood that the lender will be supervised more closely by the central bank because “all of [our] performance indicators are positive.”

The Ho Chi Minh City-based lender posted a pre-tax profit of VND567 billion (US$26.05 million) in the first half of this year, achieving 57 percent of its full-year target.

The bank’s capital adequacy ratio is at 15 percent, whereas the non-performing debt ratio is 2.09 percent.

The capital adequacy ratio is an international standard that measures a bank’s risk of insolvency from excessive losses, with the minimum acceptable ratio being eight percent.

“I can assert from these indicators that it is impossible for Eximbank to be placed under special supervision after the SBV releases the inspection results,” Phu said.

Eximbank’s stock, EIB, rebounded during the afternoon session and closed Tuesday trading at VND12,200 ($0.56) per share, down VND400 a share from a day earlier.

The lender has a charter capital of VND12.33 trillion ($566.38 million) and an equity of VND13.31 trillion ($611.39 million), according to the bank’s website.

Eximbank said it is among the joint stock banks with the largest equities in Vietnam.

The Vietnamese bank is 15.07 percent owned by Japan's Sumitomo Mitsui Banking Corp, following a $225 million deal clinched in 2007.

The SBV has inspected many local lenders during a major restructuring of the banking sector.

On Friday last week, the central bank released the results of its inspection of DongA Joint Stock Commercial Bank (DongA Bank), saying many of its leaders would be dismissed.

The lender has been placed under special supervision since then.

The move apparently came after DongA Bank posted poor performance results for 2014.

The bank last year reported a pretax profit of only VND35 billion ($1.61 million), a massive 96 percent decline from 2013, whereas its credit growth rate was only one percent.

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