VietNamNet Bridge – Misfortune does not come alone. The banking sector, which
has bogged down in the high bad debt ratio and big corporate governance problems
is also facing the wave of investors’ capital withdrawal.

Injecting money in bank shares was considered a wise decision. However, the bad
debt crisis and the wrongdoings found in 2012 have frightened investors. This
explains why many of them have decided to withdraw their capital from banks.

The capital withdrawal plans have been carried out in quietness, simply because
information exposition is not compulsory for banks.

The year 2012 witnessed 15 transactions of withdrawing capital from Sacombank,
of which, five institutional investors and one individual investor took back all
of their contributed capital. These include Bourbon Tay Ninh SBT (7.5 million
shares), Ninh Hoa Sugar NHS (5,168,444 shares), Bien Hoa Sugar BHS (1,442,100
shares), Refrigeration Engineering Enterprise REE (42,139,266 shares).
Especially, Australia and New Zealand Banking Group Limited, a big shareholder,
transferred all its 103,256,415 shares, or 9.6 percent of stakes.

Local newspapers have reported that SRF has transferred 10,000 ACB shares, 6,110
Vietcombank shares and 114,592 OCB shares in a plan to restructure short term
investment portfolio.

In a year-end press conference, ACBS announced that it has taken back all the
investment capital from six banks, namely Dong A, Techcombank, Phuong Dong, MBB,
Dai A Bank, Gia Dinh Bank.

SVC has also transferred all the 12.14 million OCB shares in a deal worth
VND133.53 billion. Prior to that, Western Bank shares were transferred by SGT
and KBC.

In principle, the capital withdrawal from banks would bring some disadvantages
to businesses. Being shareholders of commercial banks, they would find it easier
to access bank loans. Meanwhile, lacking capital proves to be their biggest
problem for now.

However, the advantage in accessing bank loans seems to be not attractive enough
to businesses, and they still decided to take back the investment capital.

A report showed that in 2013, SRF transferred all bank shares in its short term
portfolio. The value of the transaction deals has been kept secret.

SVC was one of the rare investors who spontaneously provided information about
the deal of transferring OCB shares (SVC was not a big shareholder of OCB). More
than 12 million shares of the bank was sold by SVC at VND11,000 per share. It’s
still unclear about the profit SVC made with the deal, but it clearly has had
VND133.5 billion in cash from the share transfer deal.

In early 2012, SGT reported the deal of buying 18.8 million Western Bank shares
worth VND302.1 billion, or VND16,060 per share. However, by the end of the third
quarter, SGT had transferred all the shares to two individual investors at
VND10,000 per share only.

In the third quarter of 2013, KBC announced the transfer of 26.55 million
Western Bank shares it was holding, worth VND265.5 billion. The value of the
deal was not revealed.

In most of the cases, the institutional investors who withdrew capital from
banks did not make profits or took loss. However, the investors still had to
make the share transfer because the affairs could help them arrange big sums of
money which were really very helpful to them in the current circumstances.

Businesses all lack working capital to start their new production season, while
it is very difficult to access bank loans. Even though the lending interest
rates have been decreasing, businesses still cannot borrow capital because they
cannot satisfy the banks’ requirements.

US$1=VND21,000

Manh Ha