singapore hotel: BUSINESS IN BRIEF 3/6

Foreigners, OVs to get VAT refunds as from July 1

Foreign visitors and overseas Vietnamese (OVs) will enjoy valued added tax (VAT) refunds at seven Vietnamese airports and seaports following the PM’s decision on May 30.

Accordingly, VAT refunds will be paid at four international airports namely Noi Bai in Hanoi, Tan Son Nhat in HCM City, Da Nang and Cam Ranh, and three sea ports – Khanh Hoi (HCM City), Da Nang, and Nha Trang as from July 1.

The Finance Ministry is requested to cooperate with relevant ministries, agencies and localities to implement this incentive policy.

The PM also called for strict management and examination on VAT refund declaration of goods purchased in Vietnam.

Ford Vietnam gearing up to expand nationwide

Ford Vietnam Limited recently announced it is investing VND72 billion in a new distributorship in Can Tho city and some new branches to benefit from the rising demand in the country’s fast growing auto market.

It has plans to open two new branches in Pleiku city and Hanoi.

An additional VND8 billion is being infused into its existing distributorship in Can Tho to modernise its equipment and facilities.

The investment is part of a plan to expand the company’s presence in the Vietnam marketplace nationwide. It currently operates from a three-storey complex spanning an area of 3,746 square meters with a total staff of 56 in Can Tho city.

The company’s CEO Arias Metelo said that concurrent with the expansion into Pleiku city and Hanoi it will also be offering an increased and more comprehensive line of products and services to customers.

Specifically, the company will be launching a new Ford Ranger Wildtrak 3.2L, sure to be a smashing hit with Vietnamese customers, he said.

Singaporean investors eye Vietnamese real estate market

Vietnamese and Singaporean real estate investors on May 30 toured a number of real estate projects aiming to get a better understanding of the opportunities for investment in the country.

SLP Group from Singapore said that it is keen on investments in residential, commercial office buildings and industrial parks. It is also aware that the Vietnamese Government is striving to open the market to make it more conducive to the attraction of foreign investment.

Investors said they want to develop a better understanding of the impact of recent changes in the laws, particularly those that relate to allowing foreigners to own real estate.

In Singapore, the property market is nearly saturated, while bare land is limited. Investors that want to develop, must expand overseas markets, and are eying Vietnam as a potentially lucrative target.

SLP Group CEO Tricia Teo said that housing prices in Vietnam are attractive and balanced with investment capital of businesses. In addition, foreign companies often have available funds and private real estate investment funds, along with clear strategies of development and professionalism.

The group wants to seek projects for investment cooperation and help the Vietnamese real estate sector with professional training and investment consultation.

Vietnam Real Estate Association Deputy General Secretary Tran Ngoc Quang also spoke highly and in detail about the investment cooperation opportunities in Vietnam for Singapore’s investors.

“The Vietnamese market is developing and all market forecasts confirm that this is a market with great potential,” he stressed.

Phu Yen selected as site for US$2.5 billion marina

Singapore-based marina club and property developer, ONE°15 recently has announced it has selected Vung Ro Bay in the central coastal province of Phu Yen to make its first-ever overseas investment.

It signed a memorandum of understanding (MoU) on May 26 with Vietnamese company Vung Ro Petroleum to develop a US$2.5 billion integrated marina resort in Vung Ro Bay.

The joint venture aims to transform the marina into one of the world’s finest yachting havens offering a comprehensive range of luxurious private club amenities catering, including a docking point for 350 yachts.

Plans also include for development of a 650-meter long shopping road in the centre of the project, providing luxury residential housing units for lease including ample space for schools, healthcare stations, outlets and entertainment.

As one of the world’s finest marine resorts, it will offer many kinds of the customary sports under-water activities.

7th Kohler showroom opens in Vietnam

Kohler – the world’s leading kitchen bath equipment design and manufacturing company – opened its 7th showroom in District 10 in Ho Chi Minh City on May 31.

The showroom spans over 400 sq.m, displaying roughly 1,000 kitchen and bathroom products.

At an inaugural ceremony, David Kohler, the company’s CEO, expressed his surprise at the changes and upbeat atmosphere in Ho Chi Minh City – the most dynamic city in Vietnam.

He said the event marks long-term development of the Kohler brand name in Vietnam and shows the company’s commitment to expand its investment in the Vietnamese market.

Kohler said his firm pledges to produce quality high-tech products with the Made-in-Vietnam label and attractive designs.

Dong Nai attracts US$600 million in FDI

In the five months leading up to June 1, southern Dong Nai province has garnered US$588.2 million in foreign direct investment (FDI), according to the provincial Department of Planning and Investment.

The Department reported that newly committed FDI for 28 new projects amounted to nearly US$248 million while supplemental capital for 25 existing projects tallied in at more than US$340 million.

FDI capital for the five-month period equates to 140% of that for the same period last year and amounts to 70% of this year’s plan

The investment license for a single US$4.3 million FDI project was revoked due to slow implementation during the period.

In total, 1,424 FDI projects with cumulative committed capital of US$24.965 billion have been granted licences in the province.

Mai Van Nhon, Vice Director of the management board of Dong Nai industrial parks, said the province is working with relevant departments and agencies to conduct trade and investment promotion programmes in the US and he fully expects FDI to continue its upward trend for the remainder of 2014.

The delegation has plans to work with the US Walmart Corporation through the American Chamber of Commerce (AmCham) and to seek US investment in the retail industry, supermarkets and material production zones to serve the local garment and footwear sectors.

PM adds more exit points for tax breaks

Foreigners will enjoy value-added tax (VAT) refunds at more border gates when they exit from Vietnam starting July 1, following approval by Prime Minister Nguyen Tan Dung.

In his document issued on May 30, the Prime Minister agreed to increase the number of border gates accepting VAT refunds from two to seven. They include the four international airports of Noi Bai in Hanoi, Tan Son Nhat in HCM City, Danang in Danang City and Cam Ranh in Khanh Hoa Province. Three international harbours are also on the list, including Khanh Hoi in HCM City, Danang in Danang City and Nha Trang in Khanh Hoa Province.

The new regulation is in accordance with the Government’s decree regulating that foreigners and Vietnamese residing in foreign countries and possessing passports or visas which are issued by foreign competent agencies, shall be refunded for goods purchased in Vietnam and taken along upon exit.

In 2012, a pilot VAT refund scheme for foreigners and overseas Vietnamese passing through the country’s two largest airports of Noi Bai in Hanoi and Tan Son Nhat in HCM City started on July 1. Four VAT stations and two checking stations in the two airports were set up as part of the scheme. So far, there have been 69 enterprises joining in the pilot programme, along with 268 shops nationwide.

After two years, the scheme has received positive results as the number of foreigners enjoying VAT refunds, as well as the refunds, have reportedly increased.

According to the Vietnam Customs statistics, as of February this year, there had been more than 8,600 people receiving the VAT refund. The total value of goods has been reported up to VND425 billion (over US$20.2 million), equivalent to VND32.9 billion (US$1.6 million) of VAT refunds. Of those, more than 8,000 cases were refunded in HCM City, with the total value of goods up to VND390 billion (US$18.5 million), equivalent to VND30billion (US$1.4 million) of VAT refunds.

VAMC sets annual target for debt purchases

The Vietnam Assets Management Company (VAMC) plans to purchase between VND70 trillion (US$3.17 billion) and VND100 trillion (US$4.74 billion) worth of non-performing loans (NPL) this year, according to a source from Dau Tu (Investment) newspaper.

The paper quoted the State Bank of Vietnam’s Chief Inspector Nguyen Huu Nghia as saying that the central bank outlines a NPL purchase and sale plan together with several measures to help VAMC reach the goal.

Nghia said the total NPLs that credit institutions want to sell to the VAMC climbed to VND30 trillion (US$1.42 billion). The number of NPLs is expected to increase after the issuance on June 1 of two circulars that provided classification of assets, the levels and methods of setting up of risk provisions, and the use of provisions against credit risks in banking activities of credit institutions and foreign banks’ branches.

The two circulars contain detailed information on NPLs, and reveal that debts will increase.

Nghia, however, said the two circulars will also create a safe foundation for the credit institutions to better implement their risk administration work, and restructuring as well as settlement of NPLs.

“So far this year, the VAMC has bought more than 6.3 trillion worth of NPLs, thus increasing the total NPLs that the company has purchased to VND45 trillion. In addition, the banking sector itself has already settled NPLs worth about VND10 trillion,” he said.

Recently, the central bank approved the volume of special bonds to be issued so the VAMC would be able to accelerate its purchase of NPLs in the coming time.

By the first quarter of this year many commercial banks announced that their potentially irrecoverable debts had increased strongly even though their NPLs ratio was under 3%.

For instance, Vietcombank’s potentially irrecoverable debts had gone up by 10%, to VND3 trillion. Meanwhile, BIDV’s irrecoverable debts had also been raised by 32% to VND5.56 trillion, and ACB’s VND2.3 trillion.

In an attempt to increase the settling of NPLs, Nghia said one of the measures that the central bank will immediately apply is to ask the VAMC and credit institutions to jointly build debt purchase and sale plans each month.

Vietnamese industrial fasteners face anti-dumping lawsuit in US

US Mid Continent Steel Wire, Inc has lodged complaints with the US Department of Commerce (DOC) alleging Vietnam and six other countries illegally dumped industrial fasteners on the US market causing material damages to US firms.

The Competition Management Agency (CMA) under the Ministry of Industry and Trade said that US Mid Continent Steel Wire asked the DOC to conduct an anti-dumping probe of industrial fasteners (screws, bolts and nuts) imported from 7 countries, including Vietnam.

This is the fourth anti-dumping lawsuits against products imported from Vietnam following similar suits involving P.E plastic bags, carbon welded steel pipes and steel wire garment hangers.

The DOC is scheduled to issue its decision on June 18, 2014.

According to the US statistics, Vietnamese metal fastener exports to the US reached US$41 million in 2013, an increase of 42% from a year earlier. They hit US$9.3 million in the first four months of this year.

Vietnamese products featured at Algerian fair

Vietnamese companies are showcasing their high-quality Made-In-Vietnam products and services at the 47th Algiers International Trade Fair, taking place in the Algerian capital from May 28 to June 2.

At the traditional ribbon cutting ceremony opening the fair, Vietnamese trade counselor Nguyen Van Mui and Algerian Prime Minister Abdelmalek Sellal toured the Vietnamese pavilions which featured an array of construction materials, plastics, leatherette, food, spices, and handicraft products.

Trade counselor Mui told PM Sellal that Vietnamese companies are specifically keen on partnering with Algerian companies in such fields as infrastructure, housing, consumer goods products, and aquaculture.

He highlighted the results of fruitful bilateral trade ties in recent years, noting that last year’s two-way trade turnover reached over US$280 million, up 37% compared to the figure recorded in 2012.

In the first four months of this year alone, two-way trade between the counties was estimated at US$124 million, up 39% from a year earlier, he said.

PM Sellal said that his nation could benefit tremendously from Vietnamese expertise and investment in the housing sector and production activities, as well as food processing, services, energy, electricity, electronics, garment and textile, and mechanical engineering.

This year’s event drew participation of about 680 businesses from 37 countries around the globe.

Vietnamese goods struggle to compete

The Vietnamese-To-Use-Vietnamese-Goods campaign plays an important role in building a consumer culture that learns to purchase Vietnamese products and manufacture more Vietnamese goods of high quality.

However, there remains many challenges in serving the local market and in exporting locally made goods. Business insiders and policy-makers have to seek solutions to handle these challenges.

It is reported that at least 80-90 per cent of Vietnamese goods are now on the shelves of many supermarkets. However, the Ministry of Trade and Industry said that distribution channels of Vietnamese goods in rural areas had not been stable and product promotion remains poor, resulting in low competition among local products.

A representative of Intimex Supermarket attributed the selling bottleneck of Vietnamese goods to poor market research and distribution channels. As a result, local consumers have difficulty accessing high-quality Vietnamese goods.

In addition, local consumers still prefer foreign trademarks, therefore, the question is what does the country do to change Vietnamese consumer habits?

Actually, Vietnamese consumers do not dislike Vietnamese goods, though they do not have enough information and often lack confidence in domestic producers.

Vu Kim Hanh, the chairwoman of the Association of High-Quality Vietnamese Goods Producers, said Vietnamese goods find it difficult to compete with goods produced in Viet Nam by multinational companies, adding that if distributors give priority to selling multinational companies’ goods, Vietnamese goods will have no place in supermarkets.

Hanh said many local producers have now invested in upgrading their technology to manufacture high-quality products to meet local demands. Many of them have acknowledged the position and importance of local markets and work out strategic plans on distribution, marketing and advertising to raise their reputation and the quality of their trademarks for domestic consumers.

Le Viet Nga, Deputy Director of the Ministry of Industry and Trade’s Domestic Market Department, said the ministry had proposed a scheme, known as “Viet Nam’s Pride”, to change consumer habits of local customers through the strengthening and diversification of communication and promotion campaigns.

This scheme has also set a target of increasing market share to at least 80–100 per cent of distribution channels in cities and provinces by 2020.

To reach this target, it required State authorised agencies, professional associations and mass media agencies to develop programmes to honour entrepreneurs, businesses, organisations and individuals who have obtained outstanding achievements in the campaign to give priority to use Vietnamese goods.

Deputy Minister of Industry and Trade Do Thang Hai said his ministry also worked closely with ministries and localities to determine market forecasts and supervise the real situation, to work out timely measures to intervene and stabilise the domestic market.

Hai also proposes the Central Steering Committee for the Campaign instruct relevant bodies and localities to continue raising awareness among the entire community about this campaign.

He said this year and next years, Viet Nam manufacturers would have to do their utmost to enhance product competitiveness against imported products of the same type. He noted that despite good communications, the quality of many products remains poor and it is often difficult to persuade consumers to purchase locally made products.

Trade programme aims to open up new markets

Trade promotion centres from southern cities and provinces met in HCM City on Friday to enhance cooperation between provincial trade organisations.

The representatives of trade centres in the region signed an agreement on a trade and investment cooperation programme that will be carried out from now to the end of 2020.

The programme is focused on efforts to enhance trade promotion, expand local and overseas markets, and promote goods and services of each province.

They will also work together to exploit the potential of each locality for socio-economic development.

In addition, the provincial trade promotion centres will jointly hold seminars, forums and organise training courses to improve trade promotion skills of their staff, and enhance the areas of communications and information as well.

Trade promotion programmes for the domestic market will include “Vietnamese goods fairs” to be held in residential areas and industrial parks, helping to bring locally manufactured goods to remote and rural areas.

Provincial trade fairs will include the HCM City Hi-Tech Trade and Agricultural Fair 2014; and the agricultural, industrial and trade fair of the southeastern provinces to be held in Binh Thuan, and the international trade fair in Can Tho.

Also, there will be a trade fair in Lam Dong; an international trade fair in the Mekong Delta in Kien Giang; the Mekong Forum 2014 in Soc Trang; Ba Ria – Vung Tau Trade Fair; the southeastern provinces’ trade fair – expo in Binh Duong; and the Tourism – Trade Fair 2014 in Da Lat.

Overseas trade promotion campaigns will include market study tours of ASEAN countries, including Cambodia, Myanmar; Laos, Singapore, Indonesia and others.

The HCM City Trade Promotion Centre will also take part in the Viet Lao Trade Fair 2014 and the ASEAN – India Trade Fair 2014 and organise seminars such as “Experiences for exports to ASEAN markets” seminar and exports forums.

The Can Tho Investment – Trade – Tourism Promotion Centre will conduct a market study tour of Dubai and join the Big 5 Dubai 2014.

The participating provinces include An Giang, Ba Ria – Vung Tau, Bac Lieu, Ben Tre, Binh Duong, Binh Phuoc, Binh Thuan, Ca Mau, Can Tho, Dong Thap, Hau Giang, Kien Giang, Lam Dong, Long An, Soc Trang, Tay Ninh, Tien Giang, Tra Vinh, Vinh Long, and others.

HCM City suburb seeks investment

The Investment and Trade Promotion Centre of HCM City in collaboration with the city’s Northwest Metropolitan Area Authority on Saturday organised a conference to call for investment in the city’s Northwest Metropolitan Area.

Located in Hoc Mon and Cu Chi districts 30km away from the city’s centre, the NWMA connects directly with many strategic transportation roads that link the city with Long An and Tay Ninh provinces as well as an international seaport and airport.

It is also a gateway to the Trans-Asia Road, an integrated freight railway network across Europe and Asia.

The 9,000ha area is planned to become an ecological and modern urban area of the city, increasing development of the city’s northwestern region as well as the adjoining provinces of Long An and Tay Ninh, according to Nguyen Van Thanh, chairman of the Northwest Metropolitan Area Authority.

It will contribute to the shift from an agricultural-based to services-based economy, creating more jobs and reducing traffic overload as well as population in the inner city.

As planned, the area is home to commercial and business services centres, shopping, hospitals, cultural and educational centres as well as sport and athletic training, entertainment centres, resorts, industrial parks and others.

Some projects under construction in the area included the Kenh Dong water plant, Tan Phu Trung Industrial Zone and Cu Chi Golf Course, said Huynh Minh Cuong, deputy chairman of the Northwest Metropolitan Area Authority.

Cuong said the area wanted to call for investment in building of inner roads, as well as projects to build residential areas, commercial and service centres, schools, universities and hospitals.

Investors will enjoy common incentives offered by the city such as land rental and tax incentives. For large projects, if asked, the area authority will petition the municipal government to offer more incentives.

The area, together with the Phu My Hung Urban Area and Thu Thiem New Urban Area, are the three major urban areas in HCM City.

Gov’t revises golf course plan

Prime Minister Nguyen Tan Dung has signed an order revising the government’s development plan for golf courses until 2020 by removing nine from the list and adding 15 others.

Of the nine golf courses which are no longer part of the list, two were to be located in the northern provinces of Hoa Binh and Quang Ninh; four in the central provinces of Thua Thien-Hue, Binh Thuan and Khanh Hoa; and three in the southern provinces of Long An, Lam Dong and Dong Nai.

Of the 15 additional golf courses, seven would be located in the northern provinces and city of Hoa Binh, Phu Tho, Thai Nguyen, Quang Ninh, Yen Bai, Ha Nam and Hai Phong; six in the central coastal provinces of Thua Thien-Hue, Khanh Hoa, Binh Thuan; and two in the southern provinces of Tay Ninh and Long An.

Ninety-six golf courses will remain in the plan for development by 2020.

The Prime Minister asked the Ministry of Planning and Investment to formulate a plan to revise the criteria and conditions of constructing golf courses as well as the regulations governing the courses’ operations and management. The ministry will be requested to submit it to the prime minister in 2015.

Central city ramps up PPP projects

The Japan International Co-operation Agency (JICA) will support Public-Private-Partnership (PPP) projects in the central city ahead of ramping up assistance for PPP projects through out Viet Nam in the future.

Assistant director of JICA’s Private Sector Investment Finance division, Oyama Tomohide, made the pledge at a recent conference on capital mobilisation for PPP projects in Da Nang.

“JICA will give assistance to private companies in the city to improve skills and management of PPP projects. Most private companies in the city and Viet Nam have little experience in managing the investment model,” said Oyama.

“JICA will negotiate with the Japanese government in providing the Project Development Fund (PDF) or Viability Gap Funding (VGF) for boosting the capacity of private sectors,” he said, adding that nearly all of the private sector was seen as lacking skills and proper management when operating PPP projects.

He said JICA has been helping Da Nang complete the pre-feasibility studies (PFS) for two projects, the Hoa Lien Water supply plant and Khanh Son waste treatment plant, this year.

Vu Quynh Le, deputy director of the Procurement Management Agency under the planning and investment ministry, said Viet Nam’s infrastructure was in need of more funding, but the country could only supply about 20 per cent of the total fund.

“It’s a big imbalance between infrastructure and investment. Viet Nam needs at least US$40 billion, but can only supply around $8 billion. The dilemma is the result of Viet Nam’s failure to provide a complete set of laws or instructive documents governing PPP projects, posing many challenges for the private sector,” Le said at the conference.

“The government only launched decrees on Building-Operation-Transfer (BOT), Building-Transfer-Operation (BTO) and Building-Transfer (BT) projects as well as a decision on pilot PPP project,” she explained.

She said only 300 BOT, BTO and BT projects, comprising 10 FDI projects, have developed since 2010. While no PPP projects had proceeded from 2010.

She added that Da Nang was a frontrunner in Viet Nam in deploying PPP projects, as they had co-operated with JICA on key projects.

Le Thi Phuong Lien, from the city’s department of planning and investment, said the city had joined with the Asian Development Bank and the International Finance Corporation in conducting feasibility studies of some public transport and waste treatment projects four years ago.

“We positively co-operated with JICA in 2012 in preparation process for PPP projects. We hope to complete FS of two major PPP projects – the Hoa Lien Water Plant and Khanh Son Waste treatment plant next month,” Lien said.

“We face too many problems including personnel training, skills of management and negotiation with PPP projects, while pubic investment is limited,” she said.

She added the city had also inked co-operation deals with Singapore’s Tamasek for capacity training in PPP projects, backed by a total fund of 324,000 Singapore dollars (US$258,000) for 2014-15.

Da Nang has also flagged 16 potential PPP projects relating to environmental sustainability, software parks, hospitals and infrastructure.

Two projects, the Hoa Lien Water supply plant and Khanh Son waste treatment plant, are estimated to be worth US$259 million.

Pilmico acquires Vietnamese feeds firm

The Philippines’ Pilmico International Pte. Ltd. has established a foothold in the booming local animal feed market with the purchase of a controlling stake in Vinh Hoan 1 Feed JSC.

Pilmico International and Vinh Hoan Corporation last week signed an agreement under which the former would acquire a 70 per cent stake from the the fourth largest aqua feed producer in Vietnam.

The transaction is expected to close in July 2014.

Pilmico International, a wholly-owned subsidiary of Aboitiz Equity Ventures Inc., will purchase the remaining 30 per cent within five years at a pre-agreed price set out in the agreement. The value of the transaction is approximately $28 million.

Business Development Asia (HK) Ltd. acted as financial advisor and Honor Partnership Law Company Limited acted as legal advisor to Vinh Hoan, while Indochina Capital Corporation acted as financial advisor and Gide Loyrette Nouel A.A.R.P.I acted as legal advisor to Pilmico.

Sabin Oboitiz, President and CEO of Pilmico noted, “We are delighted to have this opportunity to expand our feed business and enter Vietnam with such a strong and well respected partner as Vinh Hoan Corporation.”

AEV, through its subsidiary Pilmico Foods Corporation (Pilmico), manufactures and sells flour, feed and their by-products.

Truong Thi Le Khanh, chairwoman of Vinh Hoan Corporation said her corporation and Pilmico would conduct joint research in feed formulation in order to produce the highest quality pangasius, a type of catfish, products to customers worldwide.

Vinh Hoan 1 Feed JSC is a leading supplier of aqua feed based in Dong Thap province. Founded in 2007, it operates a 130,000 tonne a year aqua feed facility producing primarily pangasius feed. Its research and development team operates a pilot farm facility that continuously strives to improve pagnasius health and productivity. It is owned by Vinh Hoan Corporation, the largest producer and exporter of pagnasius in Vietnam.

SP and Moody’s say Vietnam credit rating stable

Standard and Poor’s (SP) and Moody’s have said they would maintain the credit rating for Vietnam despite tensions in the East Sea, short-term insecurity in some parts of the country and investor concerns over a possible fall in investment prospects.

The Singapore offices of the two credit rating agencies told the Saigon Times that the dispute regarding China’s placement of Haiyang Shiyou-981 oil rig within Vietnam’s exclusive economic zone and continental shelf would not impact credit rating prospects for Vietnam.

SP explained China’s intrusion into Vietnam’s maritime sovereignty is a short-term move in a series of actions China has been taking as part of a long-term strategy to occupy the entire East Sea.

SP said no one knows for sure how far China would push the situation but the company believed the governments of the two countries would practice restraint to prevent the situation from escalating into a military conflict.

Concerning the recent riots in some provinces of Vietnam, SP said this was a short-lived reaction of some extremist protestors to China’s unilateral aggressive actions. This rating agency hailed the Government’s efforts to put the situation under control and prevent similar incidents from threatening the safety of foreign investors in Vietnam.

Regarding negative investor sentiment on the stock market, gold prices and exchange rate, which might indicate foreign capital outflows, SP said any upheaval certainly caused negative investor reactions. Therefore, SP is not worried about the situation in Vietnam.

According to the agency, the impact of East Sea tensions on Vietnam’s credit ratings is not as strong as that of other issues such as China’s economic slowdown which will directly or indirectly affect Vietnam’s gross domestic product (GDP) and export growth in the coming time. This is the very factor which SP will look at when evaluating Vietnam’s credit rating.

Therefore, domestic and international investors in the near term can be confident in Vietnam’s stable outlook. However, it is notable that SP and Moody’s made the comments based on the assumption that the situation would not escalate dangerously and pose higher risks for Vietnam.

Deutsche Bank names new CCO and head of Global Transaction Banking, Vietnam

Deutsche Bank on May 28 announced the appointment of Jens Ruebbert as chief country officer (CCO) and head of Global Transaction Banking (GTB), Deutsche Bank, Vietnam, effective immediately.

In his capacity as CCO, Vietnam, Ruebbert will report to Gunit Chadha and Alan Cloete, co-chief executive officers, Asia Pacific, and members of the Group Executive Committee, Deutsche Bank AG. As head of GTB in Vietnam, he reports to Lisa Robins, head of Global Transaction Banking, Asia Pacific, Deutsche Bank AG.

Ruebbert has held various senior positions in Deutsche Bank during his career. Most recently he was managing director and chief operating officer, Deutsche Bank (China) Co., Ltd. He has extensive senior management experience across functions and geographies having worked in Germany, Hong Kong, Singapore, Turkey and China.

Banks reluctant to lend to small firms

Though liquidity in the banking sector is high, Ho Chi Minh City-based banks are not lending to small and medium-sized enterprises.

Outstanding loans to this category of borrowers have not increased for the last six months, Do Minh Toan, general director of Asia Commercial Bank, admitted.

He said this was mainly because small and medium companies mainly borrow against property and since property values have slumped, banks are no longer willing to accept them as security.

Phan Huy Khang, director general of Sacombank, said short-term credit has grown slowly, especially to SMEs.

His bank’s credit grew by just 4.5 percent in the first four months this year to VND116 billion (US$5.45 million), with SMEs accounting for 2.5 percent.

An Agribank spokesperson also said the bank found it very difficult to lend amidst the economic crisis.

Banks prefer to lend to well-performing businesses that do not need their loans and close their doors to loss-making companies, a manager at a major bank admitted.

SMEs are mired in difficulties and the number of them closing down and bad debts at bank are on the rise, he said.

Adding to the problem is the fact that the property market has not recovered, he added.

Credit growth at HCMC banks this year is 8.14 percent, with outstanding loans going up to VND965 trillion ($45.36 billion), according to To Duy Lam, director of the State Bank of Vietnam’s city office.

According to Lam, 80 percent of banks’ loans were for production or trading and the rest for buying property and stocks and consumption.