Leading broker Saigon Securities fined over $287,000 for tax violations

Saigon Securities, a leading brokerage firm in Vietnam, has been fined over VND7.3 billion ($287,000) for tax violations in 2022 and 2023.

The company, listed on the Ho Chi Minh Stock Exchange as SSI, said right after receiving the fine decision from the Large Enterprise Tax Department Thursday, it paid the full amount to the state budget, completing its obligations on Friday.

SSI is widely known as a "big brother" of the securities sector. Recently, the company completed an offering of 150.9 million shares to existing shareholders at a price of VND15,000 ($0.59) per share, raising its charter capital to VND19.64 trillion ($772.65 million).

The move helped it maintain its position as the securities company with the largest charter capital on the market.

After the capital hike, the two major shareholders are Daiwa Securities Group Inc., holding 15.34%, and NDH Investment Co., Ltd., 8.36%. This offering provided SSI with an additional VND2.23 trillion ($87.73 million) to bolster its investment in certificates of deposit and margin lending.

As of September 30, the company had total assets of VND66.2 trillion ($2.6 billion). Of this, SSI allocated VND44.2 trillion for investments and VND19.5 trillion for margin lending.

Its investment portfolio mainly consisted of VND13.1 trillion in bonds and VND20.92 trillion in certificates of deposit. Additionally, SSI held nearly VND5 trillion ($196.7 million) in term deposits and certificates of deposit with less than one year remaining, mostly used to secure its short-term loans.

In terms of funding, SSI is one of the few securities companies to reduce its short-term debt from VND43.2 trillion to VND39.3 trillion ($1.55 billion).

In contrast, many other firms such as Ho Chi Minh City Securities (HCM), Viet Capital Securities (VCI), Saigon-Hanoi Securities (SHS), VIX Securities (VIX), and MBBank Securities (MBS) have significantly increased their debt levels to finance margin lending and proprietary trading activities amid a low interest rate environment.

Rising profit but declining brokerage market share

SSI reported a 23.5% year-on-year increase in total revenue in the first nine months of 2024, reaching VND6.3 trillion ($247.85 million). Of this, brokerage, depository, and investment advisory services generated VND1.4 trillion in revenue, up 18%; margin lending and advance payment services VND1.51 trillion, up 34%; and investment activities VND2.94 trillion, a 38% increase.

SSI said the positive investment results were driven by the overall growth trend in the stock market and significant contributions from valuable paper and high-credit, liquid bond investments which were always paid on time, both principal and interest.

As a result, its profit after tax reached VND2.41 trillion ($94.8 million), up 35% compared to the same period last year. The company achieved 80% and 88% of its respective 2024 revenue and profit targets, as approved by the AGM.

The firm had long maintained its leading position in the stock, fund certificate, and covered warrant brokerage market share. However, since the first quarter of 2021, VPS Securities has overtaken SSI as the market leader.

This year, SSI launched several initiatives, including margin interest rate promotions like “M7 – Interest rate only 7.99%” and “Full Dragon Year – Margin interest refunds of up to VND50 million ($2,000)” to help customers optimize their profits, as well as free trading for those who actively open new accounts or upgrade trading software in an effort to attract more investors.

Despite these efforts, the results have not met expectations. Its market share in the third quarter continued to decline to 8.84%, the lowest since 2010, marking the fourth consecutive quarter of decline.

SSI shares closed Friday at VND24,350 ($0.96) apiece.