ABBank the only Vietnamese bank to record negative credit growth

An Binh Commercial Joint Stock Bank (ABBank) is the only bank in Vietnam to post negative credit growth in H1/2024 and have its bad debt ratio increase from 2.91% to 3.55% as of June 30.

However, in its Q2/2024 financial statement, ABBank, registered on the Unlisted Public Companies Market (UPCoM) as ABB, recorded after-tax profits of VND311.5 billion ($12.35 million), up nearly six-fold year-on-year.

This was made possible by foreign exchange transactions posting a year-on-year increase of 86.14% to more than VND440.4 billion ($17.46 million).

Meanwhile, services decreased sharply by nearly 45.3% to VND84.6 billion ($3.35 million).

In the first half of 2024, ABBank's pre-tax profits of VND582 billion ($23.08 million) marked a 14% year-on-year decline, fulfilling 58% of the VND1 trillion target set for the whole year.

Meanwhile, the gap between ABBank's interest income on the financial statement and the cash flow statement is increasing.

Specifically, ABBank’s six-month business performance report showed that the bank's income reached VND4,383 billion ($173.8 million), but it recorded an actual cash flow of just VND3,970 billion, VND413 billion lower.

ABBank’s total assets were valued at VND152.15 trillion ($6.03 billion) as of June 30, down 6.14% compared to the beginning of the year. Notably, customer loans decreased by 7.2% to VND91 trillion ($3.6 billion).

Customer deposits also dropped 14% to VND85.52 trillion ($3.39 million).

Loss-making clients

Several major business clients of ABBank have H1 losses or reduced profits compared to the same period last year.

VH Tourism and Investment JSC is one example. As of July 2024, VH had mortgaged many land lots in a project in Do Son district, the northern city of Hai Phong.

The company suffered net losses of VND15.5 billion in 2021, VND5.4 billion in 2022 and VND61.9 billion ($2.45 million) in 2023.

As of December 31, 2023, it reported an equity of VND2.96 trillion ($117.4 million) and total assets of VND25.3 trillion ($1 billion), up 23.3% from the beginning of the year.

Notably, the firm's liabilities amounted to VND22.34 trillion ($885.9 million), up 27.7% compared to the year’s beginning and 3.2 times higher than at the end of 2021.

Another firm, Glexhomes Joint Stock, posted 2023 profits of VND859 million ($34,000), a sharp fall of 97% year-on-year.

At the end of 2018, Glexhomes (named An Binh Star Investment JSC then) mortgaged its European Quarter project on the banks of Cau River in Thai Nguyen town, Thai Nguyen province, with ABBank. In December 2016, Glexhomes also used the An Binh City project in Co Nhue ward, Bac Tu Liem district, Hanoi as collateral at the bank.

By the end of 2023, Glexhomes was a shareholder holding more than 45.8 million ABB shares, with the original value of VND308.5 billion ($12.23 million).

Another legal entity, HTL Vietnam Real Estate Business And Construction Investment Joint Stock Company, in June 2021 mortgaged at ABBank two residential projects in Tuy Hoa town, the south-central province of Phu Yen.

Unlike VH and Glexhomes, HTL Vietnam reported a net profit of VND45.3 billion ($1.8 million) in 2023, an increase of 15.6 times from 2022. Its total assets reached more than VND2.76 trillion ($109.45 million) at the end of last year, down 30% compared to the year beginning.

Regarding capital structure, its liabilities decreased by 43.6%, and equity dropped 4% to VND1.17 trillion ($46.4 million).

In addition to credit provision, ABBank and its An Binh Securities Joint Stock Company guaranteed a series of bond packages of VH, Glexhomes and many other legal entities.

The total outstanding bonds of VH and related legal entities reached VND7.22 trillion ($286.3 million), with VH along accounting for more than two-thirds at VND5,052 billion.

ABB closed Friday at VND7,800 ($0.31) apiece.