Sacombank to record $79.3 mln income from selling industrial park-related debts in H2: broker

Private lender Sacombank will record VND2 trillion ($79.3 million) in non-interest income from selling debts related to the Phong Phu Industrial Park in Ho Chi Minh City in the second half of 2024, according to broker Vietcap Securities.

In July 2023, International Asset Auction Partnership announced the organization of an integral auction of 18 debts secured by property rights at the 134-hectare Phong Phu Industrial Park project proposed by Sacombank.

This was the sixth time Sacombank had offered to sell these debts with a starting price of VND7.93 trillion ($314.5 million). According to this bank, the total value of the debts as of December 31, 2021 was VND16.2 trillion ($642.4 million), including more than VND5.13 trillion in principal and VND11.06 trillion in interest.

At a meeting in April 2024, a leader of Sacombank said it had successfully auctioned debts secured by property rights at the Phong Phu Industrial Park project, with the selling price higher than customers’ obligations.

To date, this bank has recovered 20% of the total auction value. It is expected that 40% will be paid in 2024 and the remaining 40% in 2025.

In its Q2/2024 financial statement, the bank, listed on the Ho Chi Minh Stock Exchange as STB, recorded a 13% growth in after-tax profit to VND2.18 trillion ($86.45 million) in the quarter.

In the first six months of 2024, its after-tax profit reached VND4.29 trillion ($170.12 million), up 12.1% over the same period last year. After the first half, Sacombank fulfilled 50.4% of the year's pre-tax profit target set by the 2024 AGM.

Sacombank's profit growth was derived from many factors, notably the bank's reduction of credit risk provisions by half year-on-year to VND1.14 trillion ($45.2 million) in the context of increasing bad debt.

Its total customer loans by the end of Q2 hit VND516.63 trillion ($20.5 billion), an increase of 7% compared to the beginning of the year, with bad debt ratio rising from 2.27% at the year beginning to 2.42%.

Notably, on July 22, the People's Court of Dong Nai province in southern Vietnam issued a decision on opening bankruptcy procedures for LDG Investment Joint Stock Company (HoSE: LDG). At the end of Q2, LDG had a total outstanding debt of VND629.7 billion ($24.97 million) at Sacombank’s branch in HCMC’s District 11, including nearly VND80 billion in short-term loans and VND550 billion in long-term loans.

In the stock market, STB closed Friday at VND28,400 ($1.13) per share.