Major firms sell off assets on the cheap amid credit crunch: minister

By Nguyen Long
Tue, May 9, 2023 | 4:50 pm GMT+7

Cash flow troubles have forced many major companies in Vietnam to sell off assets at prices much lower than their market value, Minister of Planning and Investment Nguyen Chi Dung said on Tuesday.

“Many large enterprises have had to sell assets at a 50% discount, and most buyers are foreign companies. We have warned about this many times," he told a meeting hosted by the National Assembly’s Standing Committee on socio-economic issues.

"Businesses have been facing cash flow difficulties due to hiccups in operating credit policies.”

The minister added that the Vietnamese monetary market was basically stable in the first four months of this year, but lending interest rates remained high, averaging 9.56% per annum. In the year to April 24, credit supply in the country grew only 2.66% from a year earlier, showing that businesses were facing difficulties and had limited access to capital sources.

Minister of Planning and Investment Nguyen Chi Dung speaks at a National Assembly meeting in Hanoi on May 9, 2023. Photo courtesy of the government portal.

Minister of Planning and Investment Nguyen Chi Dung speaks at a National Assembly meeting in Hanoi on May 9, 2023. Photo courtesy of the government portal.

Like Dung, National Assembly (NA) Vice Chairman Tran Quang Phuong pointed out details of the financial burden. He said many businesses claimed they had to use up their reserves over the past two years, and these resources are running low.

Vu Hong Thanh, head of the legislative body's Economic Committee, said: "Issuing shares and corporate bonds has become tough, so capital mobilization for the economy is not working.”

He noted that non-performing loans at banks would rise if tough conditions prolong. Citing a report by the National Financial Supervision Commission, Thanh said the average NPL ratio of the whole banking system by the end of this March was 2.88%, up from 2.05% at the end of 2022. Some banks are close to their capital adequacy ratio (CAR) minimum levels, which means they face pressure to increase capital in the near future.

"It is necessary to shift from tightening credit to easing this supply and continuing to lower policy interest rates to drive growth as inflation pressure has eased from the end of 2022," Thanh said.

Vietnam obtained 8.2% GDP growth last year and a government report on the first four months showed a positive economic performance, but NA Vice Chairman Phuong said the report was “rather rosy”.

He noted that economic growth showed signs of decline at the end of Q3/2022; therefore the government needs to re-evaluate as Q1/2023 posted slow growth of 3.32%.

The vice chairman asked the government to clarify woes in the ailing real estate market and corporate bond issuances, and identify weaknesses among banks that have not been completely resolved. "The government also needs to assess the economy's resilience to external impacts, and definitively tackle cross-ownership and "backyard businesses" of banks."

Members of the NA Standing Committee also mentioned local officials who fear the consequences of possible errors, saying being afraid to take responsibility hinders growth.

Nguyen Thi Thanh, head of the Committee for National Assembly Deputies Affairs, said this fear has reached an alarming level. She noted that city and provincial officials often send questions to ministries instead of proactively solving issues, while ministries, in reply, say they need to observe the laws.

She said the government needs to work out a more efficient way to deal with this time-consuming problem.

Minister of Planning and Investment Dung, at a meeting chaired by Prime Minister Pham Minh Chinh last month, said his ministry received 584 documents containing questions on administrative and legal issues from the Ho Chi Minh City administration last year.

“However, most of the questions were within the city’s power to answer. This is absurd, and shows that we are afraid of responsibility.” The minister urged HCMC officials to change their attitudes to better serve the city’s growth.

Comments (0)
  • Read More
Germany energy firm wpd plans $180 mln wind power project in central Vietnam

Germany energy firm wpd plans $180 mln wind power project in central Vietnam

Germany’s energy company wpd plans to invest VND4,600 billion ($181.62 million) in building a 143 MW wind power plant in Vietnam’s central coastal province of Binh Dinh.

Energy - Fri, January 17, 2025 | 10:21 pm GMT+7

BRICS – new key export market of Indonesia

BRICS – new key export market of Indonesia

Indonesia’s non-oil and gas exports to the five major BRICS nations reached $84.37 billion in 2024, accounting for nearly 34% of the country’s total non-oil and gas export value, according to the country’s Central Statistics Agency (BPS).

Southeast Asia - Fri, January 17, 2025 | 9:54 pm GMT+7

Vietnam refinery operator BSR hits $2.6 bln valuation in bourse debut

Vietnam refinery operator BSR hits $2.6 bln valuation in bourse debut

Binh Son Refining and Petrochemical JSC, the operator of Vietnam’s first oil refinery Dung Quat, officially listed over 3.1 billion BSR shares on the Ho Chi Minh Stock Exchange (HoSE) on Friday, marking a rare "blockbuster" debut on the major bourse in recent years.

Companies - Fri, January 17, 2025 | 6:59 pm GMT+7

Two remaining weak Vietnamese banks transferred to VPBank, HDBank

Two remaining weak Vietnamese banks transferred to VPBank, HDBank

The State Bank of Vietnam, the country's central bank, on Friday announced the mandatory transfers of two "weak" private banks under its special control, GPBank and DongA Bank, to VPBank and HDBank respectively.

Banking - Fri, January 17, 2025 | 4:32 pm GMT+7

DPPA not applied to non-manufacturing consumers, Vietnam ministry insists

DPPA not applied to non-manufacturing consumers, Vietnam ministry insists

Vietnam’s Ministry of Industry and Trade does not plan to extend the direct power purchase agreement (DPPA) mechanism to non-manufacturing consumers using the national grid.

Energy - Fri, January 17, 2025 | 3:50 pm GMT+7

Two foreign giants eye luxury marina, resort projects in central Vietnam

Two foreign giants eye luxury marina, resort projects in central Vietnam

Swiss investment fund Finance Suisse and the world’s leading superyacht builder Palmer Johnson are looking for opportunities to invest in a super-luxury marina and a resort in the south-central Vietnam province of Binh Dinh.

Industries - Fri, January 17, 2025 | 3:18 pm GMT+7

Int’l investment funds interested in Danang’s financial center: city leader

Int’l investment funds interested in Danang’s financial center: city leader

International investors and financial investment funds from the U.S., Singapore, the Middle East, and Switzerland are highly interested in developing a financial center in Danang, says Ho Ky Minh, the central city’s Vice Chairman.

Economy - Fri, January 17, 2025 | 12:49 pm GMT+7

Samsung’s ex-HR head Na Ki-hong to lead Samsung Vietnam from next month

Samsung’s ex-HR head Na Ki-hong to lead Samsung Vietnam from next month

Na Ki-hong, deputy CEO of Samsung Vietnam and former human resources head at Samsung Electronics, will succeed Choi Joo Ho as CEO of Samsung Vietnam from February.

Companies - Fri, January 17, 2025 | 12:41 pm GMT+7

Vietnam, Poland agree to consider elevating relations to strategic partnership

Vietnam, Poland agree to consider elevating relations to strategic partnership

Vietnamese Prime Minister Pham Minh Chinh and his Polish counterpart Donald Tusk have agreed that the two sides should consider upgrading relations to a strategic partnership soon, on the basis of high political trust and positive results of the 75-year traditional friendship.

Politics - Fri, January 17, 2025 | 10:59 am GMT+7

Japan’s Erex to operate wood pellet plant in northern Vietnam next month

Japan’s Erex to operate wood pellet plant in northern Vietnam next month

Japan's renewable energy firm Erex is conducting trial production at its wood pellet plant in Vietnam’s northern mountainous province of Tuyen Quang and will put it into official operation in February.

Energy - Fri, January 17, 2025 | 10:54 am GMT+7

AI can’t compete with human in curiosity, creativity, emotional intelligence: FPT exec

AI can’t compete with human in curiosity, creativity, emotional intelligence: FPT exec

AI lacks curiosity, creativity, and emotional intelligence - the qualities that humans must prioritize to maintain their competitive edge, says Hoang Nam Tien, former chairman of FPT Software and FPT Telecom under Vietnam's leading tech corporation FPT.

Companies - Fri, January 17, 2025 | 9:41 am GMT+7

HCMC’s Can Gio port project gets in-principle approval

HCMC’s Can Gio port project gets in-principle approval

Vietnamese Prime Minister Pham Minh Chinh has granted in-principle approval to the Can Gio International Transshipment Port project in Ho Chi Minh City, with investment capital exceeding VND50 trillion ($1.97 billion).

Infrastructure - Fri, January 17, 2025 | 8:17 am GMT+7

Vietnam's Big 4 lender Vietcombank to issue nearly 2.8 bln shares for dividend payment

Vietnam's Big 4 lender Vietcombank to issue nearly 2.8 bln shares for dividend payment

Vietcombank will expand its chartered capital from VND55,891 billion to VND83,557 billion ($3.29 billion) via an issuance of shares to pay dividends, becoming the largest bank in Vietnam by chartered capital.

Banking - Thu, January 16, 2025 | 7:58 pm GMT+7

Indonesia exports $1.5 million worth of steel to New Zealand

Indonesia exports $1.5 million worth of steel to New Zealand

Indonesian Trade Minister Budi Santoso on Wednesday sent off export consignments of welded beam steel, measuring 1,200 metric tons and valued at $1.5 million, to New Zealand, reported national news agency Antara.

Southeast Asia - Thu, January 16, 2025 | 7:17 pm GMT+7

Vietnam to build Ninh Thuan nuclear power plant within 5 years

Vietnam to build Ninh Thuan nuclear power plant within 5 years

Vietnam strives to complete building its Ninh Thuan nuclear power plant in five years (by 2030), towards the 100th anniversary of the Communist Party of Vietnam (1930-2030).

Energy - Thu, January 16, 2025 | 5:06 pm GMT+7

Malaysia, UK discuss elevating relations to strategic partnership

Malaysia, UK discuss elevating relations to strategic partnership

Malaysian Prime Minister Datuk Seri Anwar Ibrahim and his UK counterpart Keir Starmer discussed the elevation of bilateral relations to a strategic partnership during their talk in London on Wednesday.

Southeast Asia - Thu, January 16, 2025 | 3:30 pm GMT+7