vietnam economy,Vietnam business news,business news
Banks have begun to reveal their business results in the third quarter of this year. — Photo

Some commercial banks have started to release business results from the first nine months of this year.

Nguyen Ho Hoang Vu, deputy general director of Export-Import Commercial Joint Stock Bank (Eximbank), said the bank’s pre-tax profit from core businesses by the end of September was VND1.2 trillion (US$51.72 million), completing 84 per cent of this year’s pre-tax profit target which was set at VND1.43 trillion.

However, the annual profit plan was significantly adjusted down by 40 per cent in May compared to the initial plan.

Under the impact of the COVID-19 pandemic, banks’ lending is facing difficulties as capital demand declines, especially among corporate customers. This caused many banks to record negative credit growth in the first half of this year, including Eximbank with negative 9 per cent. At the same time, the revenue from bank services was also affected as banks had to lower fees and interest for customers.

The general director of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) Nguyen Duc Thach Diem said by the end of September, the bank had completed 90 per cent of its profit plan for the whole year. This year, the bank aims to achieve a consolidated pre-tax profit of VND2.57 trillion, down by 20 per cent compared to the results in 2019.

According to Diem, in the last months of the year, credit demand is likely to improve in the peak business season. Current outstanding credit growth of the bank currently tends to increase, while the declining deposit interest rates create more conditions to lower lending interest rates, improving credit.

In addition to priority areas, according to Diem, lending interest rates at Sacombank are considerably lower than previously. The bank was approved by the State Bank of Viet Nam (SBV) to increase the credit growth room limit from 11 per cent to 13.5 per cent this year to have more room for lending in the peak business season in the final months of the year.

Sacombank’s profit growth this year was expected to exceed the target of 20 per cent, equal to last year’s VND3.2 trillion, said Diem.

General director of Viet Capital Commercial Joint Stock Bank (VietCapitalBank) Ngo Quang Trung said in the first nine months of 2020, the bank has completed 60 per cent of the profit target for the year. The bank aims to expand pre-tax profit this year by 27 per cent compared to VND158 billion last year.

According to Trung, outstanding loans are improving and likely to reach a higher level at the end of the year, aiding profit results. By the end of the first nine months of 2020, VietCapitalBank’s credit growth was 9 per cent compared to the beginning of the year. 

Vietnam, Hungary sign MoU on financial cooperation

The Ministries of Finance of Vietnam and Hungary signed a memorandum of understanding (MoU) on financial cooperation in Hanoi on October 16.

Vietnamese Minister of Finance Dinh Tien Dung said the signing of the MoU builds upon the positive achievements from an MoU signed in 2017 between the Vietnamese Ministry of Finance and the Hungarian Ministry for National Economy (now the Ministry of Finance), contributing to strengthening the bilateral friendship and traditional cooperation and expanding international cooperation in finance.

The MoU will help strengthen bilateral dialogue and coordination in fields of shared concern, especially financial analysis and forecasting and the macro-economy.

It will also help build policies, manage budget collection-expenditure and public debts, and develop Government bond markets and other economic-finance issues.

The signing is also of significance at a time when the two countries are celebrating the 70th founding anniversary of bilateral diplomatic ties in 2020.

State budget collection tops over VND975 trillion in nine months

State budget collection in the first nine months of this year reached 975.3 trillion VND (42.4 billion USD), equivalent to 64.5 percent of the estimate and representing a drop of 11.5 percent year-on-year, according to the Ministry of Finance.

Of the total, central budget revenue fulfilled 60.4 percent of the estimate andlocal budget revenue, 69.8 percent.

The ministry said that the sector deployed measures to achieve the highest target in revenue collection 2020 and strengthened revenue management in the area, prevention of revenue loss, smuggling, trade fraud and transfer pricing, and reduction of tax debts; while focusing on reviewing tax debts of branches and classifyinggroups of recoverable tax and irrecoverable tax debts.

Meanwhile, the total State budget spending in nine months was over 1.113 trillion VND, equivalent to 63.7 percent of the estimate, rising 8.1 percent over the same period in 2019. The spending aimed to meet the demand of socio-economic development, defence, security, State management and payment for debts as well as pandemic prevention and natural disaster mitigation.

As of September 24, 17.49 trillion VND had been paid to COVID-19 pandemic prevention and control and support to affected people.

In the rest of the year, the ministry will direct the Administration of Taxation to focus on reclaiming tax debts and make information public in line with the Law on Tax Management.

Besides, the ministry will continue assessing the State budget collection in 2020 in accordance to economic growth scenarios, while making reports on State budget spending management for the fourth quarter, and coordinating with relevant agencies to speed up the progress of capital allocation and disbursement./.

Vietnam striving to combat IUU fishing: Spanish official

Vice Chairman of the Spanish Chamber of Commerce in Vietnam Rubén Saornil Mínguez recently appreciated efforts by the Vietnamese Government, businesses and fishermen in fighting illegal, unreported and unregulated (IUU) fishing following the European Commission (EC)’s recommendations.

He made the assessment when attending a conference themed “Promoting Tuna Value Chain, Combating IUU Fishing and Exporting Tuna to EU in line with the EVFTA Commitments” in the central province of Khanh Hoa on October 10, the Nong nghiep (Newspaper of Agriculture) reported.

To implement EC recommendations, Vietnam issued the Fisheries Law 2017 and guiding documents towards sustainable aquaculture and fishery development. And to boost strict enforcement, the country set up a national steering committee for IUU fishing prevention and has required all fishing vessels to install position monitoring devices.

The moves show that the country has made a remarkable improvement compared to what it did in the previous inspection, he reportedly affirmed.

As of August 31, 24,851 out of the 30,851 fishing vessels, each with the length of 15m and above, or 80.61 percent of the total fleet had been equipped with the vessel monitoring systems.

Rubén also reportedly spoke highly of Vietnam’s moves to intensify the traceability of aquatic products in the supply chain, well control fishing vessels in and out of fishing ports, as well as the output of seafood handled at the ports, and build ships in accordance with Vietnamese and EU standards.

Vietnam striving to combat IUU fishing: Spanish official hinh anh 2
Deputy Minister of Agriculture and Rural Development Phung Duc Tien and Vice Chairman of the Spanish Chamber of Commerce in Vietnam Rubén Saornil Mínguez visit tuna processing plant of Hai Vuong Limited Company (Source:

In addition, the country has also made a master plan for the exploitation and protection of aquatic resources so as to streamline the fishing vessel fleet in accordance with reserves as well as sustainable and responsible fisheries development.

The official acknowledged Vietnam’s efforts to contribute ideas for regional and international fisheries organisations, especially those involved in the sustainable fisheries development, for example the United Nations Fish Stocks Agreement (UNFSA), the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (PSMA), and the ASEAN IUU Network.

He stated that Vietnam currently ranks third in the world in terms of seafood exports, while the EU is a large seafood consuming market with around 22kg per person per year. Therefore, the EU-Vietnam Free Trade Agreement is a good chance for Vietnam’s aquatic products.

The official stressed the need for Vietnam to trace the origin of aquatic products and avoid IUU fishing./.

Vietsovpetro surpasses oil and gas production targets

The Vietnam – Russia oil and gas joint venture Vietsovpetro has reported that its oil and gas production during January-September surpassed the set target in the period.

Despite dual crisis of the COVID-19 pandemic and substantial fall in the global oil prices, Vietsovepetro has carried out comprehensive measures to ensure safety for its workers and maintain stable production and business activities.

The venture exploited nearly 2.42 million tonnes of oil and condensate at Lot 09-1, or 8.4 percent higher than the set plan. Of the total amount, 1.8 million tonnes was pumped from Bac Ho oil rig, 56,000 tonnes from Nam Rong-Doi Moi, 60,000 tonnes from Gau Trang, and 67,000 tonnes from Tho Trang.

At Lot 09-3/12, more than 164,000 tonnes of oil was exploited, exceeding the set target by 15.4 percent.

During the nine-month period, Vietsovpetro exploited 62.6 million cubic metres of natural gas, surpassing the goal by 11 percent. More than 986 million cubic metres of gas was brought ashore, or 29 percent higher than the set goal.

From January – September, Vietsovpetro earned 898.5 million USD from selling oil exploited from Lot 09-1, and contributed nearly 365 million USD to the State budget. Meanwhile, revenue gained from oil at Lot 09-3/12 reached 62.6 million USD, 24.8 million USD of which was contributed to the State budget.

In a bid to complete the set target for the whole year, Vietsovpetro continues to outline rational measures in response to the duel crisis.

The venture has pumped up 500 million cubic metres of gas from Thien Ung field, which has been in operation since late 2016.

The Thien Ung field development project, 270 km southeast of Vung Tau city, is a component project under the gas development plan of the Vietnam Oil and Gas Group (PetroVietnam).

As planned, exploited products from Thien Ung will be brought offshore via the Nam Con Son 2 pipeline - Phase 2.

Vietsovpetro will drill new fields to provide recipients with an estimated gas output of up to 2 million cubic metres per day.

The operation of the BK-TNG rig at the Thien Ung field aims to create infrastructure connectivity and promote the exploration and exploitation of gas-condensate fields in the Nam Con Son basin area and the southern continental shelf of Vietnam, as well as contribute to ensuring national energy security and asserting national sovereignty over seas and islands.

Earlier, the venture successfully launched the base of the BK-21 oil rig at Bach Ho field. It is an uninhabited wellhead platform located near the MSP6 and MSP7 fixed platforms. Products exploited from BK21 will be transported to MSP6 through an underground pipeline.

Manufacturing, installing, commissioning, and putting the BK-21 platform into operation is an important milestone in increasing oil and gas production and ensuring the completion of Vietsovpetro’s production plan in 2020.

Earlier this year, venture Vietsovpetro planned to earn 1.38 billion USD in revenue for the whole year.

Leaders of the joint venture said the Vietnamese side hopes to gain 102 million USD in profit, while the Russian side aims for 98 million USD. The firm is expected to contribute 630 million USD to the State budget this year.

At the 52nd meeting of the Vietsopetro Council, the two sides set a goal to produce 3.12 million tonnes of oil and 70.4 million cubic metres of natural gas in 2020.

In 2019, Vietsovpetro put two oil rigs into operation, meeting its target to expand exploitation areas.

Thanks its efforts, the joint venture’s oil output increased over 236,000 tonnes.

Vietsovpetro raked in 1.79 billion USD from oil sales in the year, equivalent to 112.4 percent of the set plan.

It earned 446.4 million USD in profits and contributed more than 1.15 billion USD to the State budget./.

Tuna exports poised to surge ahead in remaining months of 2020

By enjoying numerous advantages brought about by the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), tuna exports during the remainder of the year are projected to record a sharp increase, according to industry insiders.

This comes after numerous tuna shipments have been sent to the EU market over the past two months. Based in the south-central province of Khanh Hoa, Hai Vuong Co., Ltd has officially exported 48 tonnes of tuna products with a value of approximately US$400,000 to Spain.

Since the enforcement of the EVFTA, the firm has accelerated tuna exports to various EU markets, with the export value in August and September reaching a figure of US$16 million, representing a 1.5–fold increase from the average figures seen during the initial months of the year.

Le Huu Hoang, vice chairman of the Khanh Hoa Provincial People's Committee, points out that numerous tariff incentives under the trade pact are anticipated to facilitate greater seafood exports to the fastidious market.

With regard to the export prospects of tuna moving forward, Deputy Minister of Agriculture and Rural Development Phung Duc Tien states that with the EVFTA coming into force, tuna exports to the EU market in August and September have recorded an increase of between 11% and 13%. Indeed, local businesses have made all-out efforts to invest in machinery whilst renovating processing technologies in a bid to improve the overall quality of tuna exports to the demanding market.

Rubén Saornil Mínguez, vice chairman of the Spanish Chamber of Commerce in Vietnam, has said the EVFTA will create additional opportunities for Vietnamese seafood to enter the EU market, noting that local enterprises are now required to meet high standards in terms of quality and origin traceability as a means of enjoying the tariff preferences.

Furthermore, local firms must ensure food safety and hygiene standards are maintained, as well as a higher social and environmental responsibility for seafood exports, Mínguez added.

Moreover, the Spanish trade official also underlined the need to fight illegal, unreported, and unregulated (IUU) fishing following recommendations put forward by the European Commission (EC), while pushing the local tuna supply chain to meet the stringent requirements set by the EU importers.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), with the enforcement of the EVFTA, frozen tuna fillets will enjoy 0% import duties in line with the three-year roadmap while domestic businesses will have opportunities to expand into new markets and fully tapping into the competitive advantages in comparison to other countries.

Vietnamese tuna exports to the fastidious market during the final three months of the year are projected to reach US$123 million, despite the adverse global impact of the novel coronavirus (COVID-19).

Projects post $1.13 billion in losses

Twelve loss-making projects under the Ministry of Industry and Trade (MoIT) have posted accumulated losses of VND26.3 trillion (US$1.13 billion).

The Government’s report to National Assembly’s deputies has released updates about the 12 loss-making projects.

The report said the financial situation of the projects was still gloomy in the first half of the year as stockholder equity was minus VND7.2 trillion. Their total was VND59.1 trillion with total liabilities of VND63.3 trillion.

It added that figures about the economic losses to the State caused by the 12 projects are still unclear. This was because of the disputes and problems in engineering-procurement-construction (EPC) contracts in five out of 12 projects including DAP No 2 Lao Cai, Ninh Binh Fertiliser, Ha Bac Fertiliser, Dung Quat Shipyard Company and Thai Nguyen Iron and Steel Corporation (TISCO). The final settlement and exact valuation of the projects have not been completed.

To solve difficulties in the projects and manufacturing industries such as steel, fertiliser and fibre, the ministry has used trade defence tools. This helps projects such as DAP fertiliser factory No 1 in Hai Phong, Viet Nam - China Steel Company, Thai Nguyen Iron and Steel Corporation keep their market shares and improve the business situation.

However, the Phuong Nam Pulp Plant (Vinapaco) project, capitalised at VND3 trillion, has seen more complex issues as it cannot find buyers.

In 2017, Vinapaco, the project’s investor organised the first auction, but it failed. After the failure, the company conducted the second asset and inventory valuation.

As of December 31, last year total liabilities of the project had reached VND3 trillion.

The problems of the projects also have relations with a lawsuit between PVComBank and Vinapaco, under which the former has sued the latter and asked for payment of VND592.3 billion.

Currently, Vinapaco is facing financial difficulties and cannot guarantee to pay the principal and interest. This lawsuit may result in the project's assets and inventories unable to be auctioned under the direction of the Government. The MoIT is assisting PVcomBank and Vinapaco to review and negotiate a settlement.

The 12 loss-making projects are Dinh Vu Polyester Fibre Plant, Dung Quat Bio-Ethanol Plant, Phase 2 of Thai Nguyen Iron and Steel Corporation’s (TISCO), Phuong Nam Paper Mill, Ninh Binh Fertiliser Plant, Ha Bac Fertiliser, DAP Fertiliser 1 Lao Cai, DAP Fertiliser 2 Hai Phong, Binh Phuoc Ethanol, Phu Tho Ethanol, Dung Quat Shipyard and Viet Nam - China Steel Company.

The total initial investment of these projects was nearly VND43.7 trillion and was later adjusted to more than VND63.6 trillion (up nearly 46 per cent). 

Da Nang revs up investment in IT and electronics industries

Da Nang has commenced construction of the city's second software park, aiming to boost the key export industry and build Da Nang into a ‘smart city’ in 2025.

The city’s information and communications department said the park will be built on 2.87ha with an investment of VND704 billion (US$30.6 million) for the first phase.

It is expected to be the workplace for 6,000 IT engineers by 2023.

Da Nang currently has two centralised information technology zones, namely the Da Nang Software Park and Da Nang IT Park, drawing 1,900 businesses working in IT and communications industry with revenue of more than $1.2 billion each year.

The key industry also contributes 5.5 per cent to the city’s gross regional domestic product (GRDP) annually, and it will account for 15 per cent by 2030, according to the department.

The Da Nang IT Park on 341ha was designed as a ‘Silicon Valley’ in central Viet Nam and has attracted investment from Taiwan, South Korea, Thailand and Japan.

The park is expected to create revenue of $1.5 billion each year with 25,000 jobs and an urban area for 100,000 people from 2030.

Also on the occasion, the Da Nang Information Technology Park (DITP) JSC company launched the first surface-mount technology (SMT) factory at Da Nang Hi-tech Park after three months of construction, offering an attraction to other high-tech industries investors from domestic and foreign countries to the city.

General director of the DITP company, Nguyen Anh Huy, said the factory will begin manufacturing printed circuit boards and electronic components for export later this month before entering mass production from 2021.

Huy said the SMT factory will be provided with a complex of research and development centre, electronic component production, high-quality human resources incubation and training centre in the years to come.

It plans to build more 17 factories in IT, electronics, high-tech industries and supportive industries. 

New circular aims to abolish ambiguity in labelling

The Ministry of Industry and Trade (MoIT) has submitted a draft circular on 'Vietnamese products and goods' and 'products and goods made in Viet Nam'.

Under the circular, there would be no “Made in Vietnam” marks on Vietnamese goods circulating in the domestic market.

Many businesses are deceiving consumers by importing components for assembly in Viet Nam and then affixing labels like “Vietnamese goods”, “Made in Vietnam”, or “high-quality Vietnamese goods”.

Many businesses have labelled low-quality goods as Vietnamese products to deceive consumers to take advantage of the fact that Vietnamese people are using Vietnamese goods more and more.

The ministry said Viet Nam has issued many regulations on the origin of goods, including how a product is considered to have Vietnamese origin. However, the regulations have only been applied for export and import goods, helping them enjoy import tax incentives in free trade agreements or for other purposes of foreign trade management. For domestically-produced goods, including those produced from imported materials and then circulated domestically, there is currently no regulation on labels like “Product of Vietnam” or “Made in Vietnam”.

The lack of regulations on how to define “products of Vietnam” or “Made in Vietnam” has caused confusion for many organisations and individuals when they want to accurately state the country of origin on labels of products and goods circulated domestically.

Some products, even though they are only simply processed and assembled in Viet Nam, are also labelled “Made in Vietnam”, making consumers frustrated. However, management agencies have no legal foundation for arbitration.

Therefore, the MoIT intends to stipulate that those to be expressed as products and goods of Viet Nam include goods of purely Vietnamese origin, goods made in Viet Nam from all raw materials originating in Viet Nam and goods not produced in Viet Nam from all raw materials of Vietnamese origin but undergoing final processing in the country which fundamentally changes the nature of goods.

For goods with simple processing, they will be considered not of Vietnamese origin.

The new circular will also remove the phrase “Made in Vietnam” which depending on the production and processing process, organisations and individuals could choose and use only one of the following labels “Produced in Vietnam”, “Manufacturing in Vietnam”, “Country of origin: Vietnam”; “Produced by: Vietnam”.

The ministry hopes that the circular will establish a mechanism to prevent trade fraud, protect domestic production and the interests of consumers. 

HCM City's trade co-operation programme with provinces a big success

The trade co-operation programme between HCM City and southern provinces has over the past years helped significantly promote consumption of his province’s products, enabling businesses to expand production and trading and contributing to socio-economic development, a Ben Tre Province leader has said.

Nguyen Huu Lap, vice chairman of its People’s Committee, said, “The programme has helped manufacturers in the province find regular outlets for their products, making them feel secure about investing more into expansion and improving product quality.”

Chau Thi Le, deputy director of the Long An Province Department of Industry and Trade, said HCM City, a large market for her province’s products, played an important role in guiding provinces’ agriculture by fixing standards their produce have to meet to sell to it.

“The province actively encouraged farmers to change their methods towards safe production in accordance with VietGAP standards, but achieved very limited results.

“When HCM City set the purchase standards … farmers immediately changed their production methods to enable their produce to meet these requirements.

“Thanks to HCM City’s requirements, Long An has built 17 safe agricultural supply chains for vegetables, rice, chicken, pork, beef, and seafood and is building three more for dragon fruit, vegetables, mushrooms.

“Besides, many safe and organic production models are being adopted.”

Bui Ta Hoang Vu, director of the HCM City Department of Industry and Trade, said, “Enhancing demand-supply links is an indispensable and important aspect of trade.

“The Trade Cooperation Programme between HCM City and other provinces and cities has had a positive effect, creating comprehensive co-operation in the field of trade between the city and provinces and cities in the south-eastern and south-western regions.


“During the last five years 3,193 contracts and MoUs have been signed between city businesses and those in the southern region worth an estimated VND4.5 trillion (US$194.06 million) a year on average.”

Provinces and cities have created favourable conditions for HCM City businesses to set up shop there and to collaborate with farmers for animal breeding and cultivation, according to his department.

Twenty eight firms participating in the city’s price stabilisation programme have invested more than VND18 trillion ($778.1 million) in 47 production facilities and 63 agricultural farms in their localities.

Thus they have created reliable raw material sources and ensured quality, the department said.

Saigon Coop, for instance, has developed a system of warehouses, logistics and supermarkets throughout the country and is a large buyer of agricultural products.

Vissan is associated with many livestock breeding farms in provinces and cities. Saigon Livestock Breeding and Food Processing Company (Sagrifood) annually supplies 80,000 piglets to breeding farms in 23 provinces and cities nation-wide, of which 80 per cent are in the south.

Nguyen Huynh Trang, deputy director of the city Department of Industry and Trade, said most enterprises participating in the city’s price stabilisation programme distributed at a single price nation-wide.

Thus, they contributed to stabilising markets around the country, she pointed out.

"In addition, the city’s three wholesale markets receive an average of 8,000 tonnes of agricultural products and foodstuffs every day from other localities for consumption in the city and transshipment to many other provinces and cities, helping balance supply and demand in the southern region.”

Following the resounding success of the programme, the HCM City Department of Industry and Trade will continue to work with its counterparts in other cities and provinces for another five years.

They plan to enhance exchange of information, sharing their experiences in management of industry and trade, production, and trading and discussing the strengths of each province and city.

In the next phase, the programme is expected to not only expand domestic consumption, but also promote export of industrial consumer products and household appliances and build brands for agricultural products and specialities of each locality.

Government agencies will work to improve the efficiency of the programme to enable more businesses to meet, exchange information and explore co-operation opportunities.

Lap said the Ministry of Industry and Trade, HCM City and businesses should continue to provide businesses in his province with information about the market and requirements for goods, help connect them with distributors and create favourable conditions for their goods to enter the city’s modern distribution network.

Duong Anh Duc, vice chairman of the HCM City People’s Committee, said, “The city will continue to direct relevant departments and agencies to clear obstacles to furthering trade between the city and other cities and provinces.”

72% of EU businesses plan to expand in Viet Nam

A majority of European businesses in Viet Nam expect to increase their operations in the country, the sixth Business Sentiment Survey of the EU-ASEAN Business Council released on Thursday shows.

A total of 72 per cent of respondents in Viet Nam have plans to expand, while 63 per cent of respondents in the country are satisfied with the Government’s COVID-19 response, the survey states.

According to the survey, 56 per cent of EU businesses also have plans to expand operations in ASEAN as they see the region offers them the best economic opportunities.

“This year’s survey confirms that ASEAN is still seen as the region of best economic opportunity, but as would be expected during the COVID-19 crisis, the outlook for increased trade and investment shows signs of softening,” Donald Kanak, chairman of the EU-ASEAN Business Council, said.

This year’s survey asked which regions in the post-COVID-19 era would be the candidates to attract more investment in supply chains. While ASEAN received the most votes, others such as Europe and China also received many.

“Almost half expect supply chains to be reorganised following COVID-19. That makes the unfinished business on the ASEAN economic integration and progress on trade facilitation crucial to ASEAN’s sustainable recovery from the economic downturn,” Kanak said.

Executive director of the EU-ASEAN Business Council, Chris Humphrey, added: “The message from the survey is clear: ASEAN economic integration appears to be at a standstill. ASEAN and its constituents need to pick up the pace to meet the AEC Blueprint 2025 goals. European businesses are now adjusting their business strategy to local environments, rather than waiting for substantial progress in regional economic integration.”

However, Humphrey noted: “European businesses are also very concerned about the lack of progress on further FTAs with the ASEAN region, and in particular the long talked about region-to-region FTA which eight out of 10 see as potentially delivering more benefits than a series of bilateral FTAs.”

The survey was conducted from April to July during the height of the pandemic and lockdowns in the region. In total, 680 respondents were recorded from European businesses in the 10 ASEAN member states. Respondents were either in the services or manufacturing industries, ranging from hospitality and tourism to the manufacture of pharmaceuticals and medical equipment.

Banks to keep profits on new decree

A new decree released by the Government will allow State-owned commercial banks to save cash to increase their strength instead of paying dividends to shareholders.

Decree 121/2020/ND-CP will amend Decree 91/2015 dated October 13, 2015 regulating the State capital invested in State-owned companies and management of State capital and assets in the business.

The new policy allows government agencies to increase the State capital in joint stock companies and limited-liability firms with two or more board members.

Commercial banks with the State holding more than 50 per cent of the charter capital are subject to the new decree.

Under the new decree, the three large-cap State-owned banks – the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), the Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), and the Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV) – are now able to keep and use their profits to increase capital instead of paying cash dividends to shareholders.

In recent years, the State Bank of Viet Nam (SBV) – representing the Government to monitor the State capital in financial-banking firms – asked the three banks to pay cash dividends, but the request was always rejected by other shareholders.

SBV is holding nearly 81 per cent in BIDV, more than 64 per cent in Vietinbank, and nearly 75 per cent in Vietcombank.

Vietinbank and Vietcombank planned to issue bonus shares using their profits recorded in 2020 to increase capital, meeting BASEL II standards, preparing for any economic shocks caused by the prolonged COVID-19 pandemic and the instability of the global economy.

At its annual shareholders’ meeting on April 23, Vietinbank decided to use the remaining post-tax profits during 2017-19 to issue bonus shares and increase capital. The issuance rate has not been selected.

Vietcombank has planned to issue bonus shares at the rate of 18 per cent in the second six-month period of 2020, meaning every shareholder will receive 18 new shares for each 100 shares they have. The time has not been decided yet.

According to Vietinbank chairman Le Duc Tho, the adjustment of the Decree 91/2015/ND-CP is key to the development of the bank as the plan on using 2017-18 profits to increase capital has already been approved by the Government. 

Dragon Capital fund to buy more than 2.8 million ACB shares

DC Developing Markets Strategies Public Limited Company (DCDMSPLC), a member fund of Dragon Capital fund group, has registered to buy more than 2.8 million shares of Asia Commercial Bank (ACB).

The transaction is expected to be conducted from October 12 to November 10, via order matching or put-through method.

This fund currently does not own any ACB shares. If the transaction is successful, the fund will hold 0.13 per cent of the bank’s charter capital.

Closing Monday, ACB shares reached VND23,600 per share, up 36 per cent compared to the end of July. It is estimated that at this price, Dragon Capital’s member fund will have to spend more than VND66 billion (US$2.8 million) for the purchase.

Two other member funds of Dragon Capital, First Burns Investments Limited and Asia Reach Investments, have also registered to sell 46.6 million ACB shares.

First Burns Investments Limited plans to sell more than 32.9 million shares and Asia Reach Investments Limited plans to sell 13.7 million shares. The transactions will be conducted via order matching or put-through method from October 9 to November 6 this year.

After the sale, First Burns Investments Fund will reduce its ownership in ACB from 4 per cent to 2.48 per cent. Meanwhile, the ownership rate of Asia Reach Investments Limited will decrease from 3.15 per cent to 2.51 per cent.

Director of Dragon Capital Dominic Scriven is also a Member of the Board of Directors of ACB.

The bank is preparing procedures to transfer listing from the Ha Noi Stock Exchange (HNX) to the Ho Chi Minh City Stock Exchange (HOSE) in November this year. 

HCM City opens new Security Operation Centre

HCM City’s Department of Information and Communications and the State-owned Sai Gon Industry Corporation (CNS) on Sunday opened the new Security Operation Centre (SOC).

Speaking at the launching ceremony, Deputy Chairman of the city People’s Committee Le Thanh Liem said the centre is one of the main four pillars of the project to build a smart city from 2017 to 2020, with a vision to 2025.

“Ensuring network safety and security is considered a top priority task,” he said.

Nguyen Hoang Anh, chairman of the Board of Members of CNS, said the key task of the centre is to ensure information safety and cybersecurity for ICT infrastructure and important database systems at all department, branches and State-owned corporations.

It will be expanded later to all businesses and organisations in the city and the country.

The centre will also provide information security services and other products to domestic and foreign markets.

It will collect information related to internet protection, security threats and vulnerability of partners and suppliers, and will give quick warnings about information security risks to organisations and units.

“The centre will support the city in enhancing State management of network security,” Anh said.

Liem urged the department to improve the IT ecosystem and create detailed regulations for the operation of the SOC, and regulations on coordination, administration and supervision.

The department must quickly complete investment procedures for projects in the smart city development plan and submit them to the city’s People's Council for approval, he said. 

TECHFEST 2020 officially underway

Following the success of previous contests, TECHFEST 2020 has officially started, drawing the attention of hundreds of thousands of startups across the country.

Since early October, the organisation board of TECHFEST 2020 – an annual contest specialised in aiding potential startups – has been calling for participating startups from Vietnam and overseas. Accordingly, the short-listing round has taken place from October 8 to November 8, and the semi-finals and the finals will be held on November 24 in Ho Chi Minh City and on November 28 in Hanoi.

Mandy Nguyen, head of the programme’s organisation board, said that Vietnamese startups’ demand is larger than the competition, in other words, they need a big playground where they can improve their abilities through training programmes and other activities.

“Therefore, this year's contest focuses especially on training and linking startups to experts and related consultants, as well as organising demo pitching to aid capital mobilisation,” said Nguyen. “Particularly, many new awards will be offered to promote creativity and innovation among startups specialised in healthcare, finance, export-import, and sustainability, among others.”

The contest reflects the determination of the Ministry of Science and Technology as well as other organising members like SVF and Startup World Cup in enhancing the quality of local startups in the international playground while promoting the image of the Vietnamese startup ecosystem to all partners across the globe.

Cassie Nguyen, co-founder and COO of Abivin – the champion of TECHFEST 2018, shared, “Thanks to the competition, we had a great opportunity to meet and connect with influential people in the Vietnamese startup circle.”

Accompanying the annual programme are businesses and organisations that have long experience in technology and innovation such as K-Group Vietnam, SunShine Holding, VMED Group, VinaCapital Ventures, and others.

Southern industrial park occupancy rate reaches 84.5 percent: CBRE

The occupancy rate at operational industrial parks in the major industrial localities in the south averaged 84.5 percent during January-September, according to a report from CBRE Vietnam. 

The occupancy rate at operational industrial parks in the major industrial localities in the south averaged 84.5 percent during January-September, according to a report from CBRE Vietnam.

In Ho Chi Minh City, the rate has surpassed 90 percent.

In the past two years, Vietnam’s industrial property market has seen significant surges in occupancy rate and leasing prices.

CBRE Associate Director Pham Ngoc Thien Thanh said high leasing prices in several industrial parks in HCM City, Dong Nai and Long An, which went up 20-30 percent from last year, coupled with two waves of the COVID-19 pandemic, caused significant difficulties to the market.

However, in Q3, investors and owners of ready-built factories offered many support policies to their customers, including reducing leasing prices and infrastructure maintenance cost by 10-30 percent, helping slow down growth of rental cost as compared to the last quarter.

With the pandemic’s impact, the ready-built factory and warehouse market has witnessed a cooled leasing price while the number of inquiries continues to rise in key industrial parks. It is expected that by the end of 2020, the total supply of ready-built factories and warehouses in the south will reach nearly 2.7 million square metres, up 28.3 percent year on year, Thanh added.

According to CBRE, the coronavirus pandemic also served as a catalyst for a stronger warehouse demand thanks to rapid expansion of e-commerce and backlog of goods. Leasing prices at new warehouses developed by foreign investors inched up 5-10 percent in the first three quarters from the same time last year.

CBRE forecast that developing cold and frozen storage warehouses will be the trend in the time ahead as fresh food distribution network is expanding nationwide.

Additionally, multi-storey warehouse is a good option for land constrained areas, helping e-commerce enterprises have larger storage space.

Banks' digital transformation in need of new legal framework

In the wave of bank’s digital transformation, it is necessary to establish a comprehensive legal framework to completely boost the process.

At the conference on digital economy, talking about the impacts, opportunities, and its utilisation for Vietnam. Tran Hung Son, vice president of the Institute for Development and Research in Banking Technology urged improvements in the Vietnamese legal framework on digital transformation at banks.

He stated that the efinance sector plays an important role in the digital economy. It is also a sector whose innovation goes beyond current regulations. Regulations are necessary on capital mobilisation, payment, and investment management services.

Banks' digital transformation depends on how well they grow and position themselves in the new ecosystem. There are three stages in banks’ digital transformation, such as reacting to new forms of competition, technology adaptation, and strategic positioning.

“Banks are at the first stage of their digital transformation journey and part of them are in the second stage. No bank has made it to the third stage yet,” said Son.

The digital transformation can complicate current risks or create new ones. The lack of a legal framework can hold up the adjustment of the transformation. A new legal framework should be released to improve banks’ innovation, ensure the stability and competitiveness of the market, and protect customers.

Son added that challenges in the legal framework are of three aspects: regulations in the finance sector have not kept up with technological developments, relevant regulations still lag behind those in other countries, and there is a lack of connections between banks and fintech organisations.

Additionally, the legal framework needs to target four core points, including comprehensive financial development, finance stability, finance integrity, and customer protection.

Vietnam has been seeing a strong digital transformation wave with a multitude of new products launched over the past four years.

At the beginning of 2017, TPBank introduced its TPBank Livebank application while in early 2018, OCB launched its OCB OMNI. In September 2018, VPBank opened its digital banking Yolo after its introduction of Timo. Military Bank allowed customers to transfer money via Facebook and created a new interactive channel with customers via the eMBee fanpage. BIDV launched its BUNO to conduct easy transfers with only the use of a phone number.

According to the Vietnam ICT Index 2019, banks tend to focus on updating core banking and automation. However, banks partially ignore base investing in resource management and risk management.

Although internet banking services for individual users such as transaction checking, transfer, and savings are increasingly popular (as the services have already reached their saturation point), these services are still underdeveloped while services for business users are growing at a better pace. From 2016 to 2019, digital banks reflect a marked increase as well.

There is still a difference between banks' technological investment. Particularly, BIDV led the Vietnam ICT Index from 2017 to 2019 in the categories of infrastructure and IT application. State-owned VCB, VietinBank, and Agribank ranked lower than other joint-stock commercial banks.

Nam A Bank ranked second in terms of human resources and online services. GP Bank ranked last regarding online services and infrastructure.

Turning risk into opportunity

Both the world and Vietnamese economies have been heavily affected by the COVID-19 pandemic since the beginning of this year. The complicated developments of the pandemic have disrupted supply chains as well as commercial activities on a global scale.

At the same time, Vietnamese enterprises are also facing a lack of supply of raw materials for production and consumption markets for their products. This is an unprecedented challenge.

Hundreds of thousands of businesses have had to narrow their production activities, tens of thousands of businesses have had to temporarily halt their business or even close their doors to wait for dissolution procedures.

Survey results from the Ministry of Planning and Investment show that more than 85% of enterprises have been negatively affected by the COVID-19 pandemic, of which a number of industries such as aviation, accommodation services, tourism, textiles and garments have suffered the most with more than 90% of enterprises in these sectors having been hit hard by the pandemic.

But in this difficult situation, the Vietnamese business community has once again proven its bravery, self-reliance, and perseverance in finding opportunities to survive and develop.

In particular, Vietnamese entrepreneurs have been the nucleus and "captains", always standing firmly to help businesses overcome difficulties amid the pandemic.

A series of solutions have been deployed by entrepreneurs. They quickly looked for new sources of raw materials, focused on expanding consumption markets, changed key production and business products, and applied new forms of business such as e-commerce or online commerce promotion, among others.

Thanks to these creative measures, many businesses have overcome their difficulties to maintain operations and continue making significant contributions to national economic recovery.

Over the past nine months, domestic enterprises have affirmed their role as the main driving force for the growth of national export activities with export revenue estimated at US$71.4 billion, up 19.5%, accounting for nearly 35.3% of the nation’s export revenue while the foreign invested sector posted US$131.03 billion in export revenue, down 2.9%.

According to experts, although there still remains great challenges from the COVID-19 pandemic, there are yet opportunities amid risks. The opportunities include the advantage of Vietnam having brought about effective control of the pandemic and the process of restructuring the global supply chain.

And to turn "risk" into "opportunity", more than ever, entrepreneurs must assert their leadership role, not only in guiding the handling of situations but also in terms of inspiring others and persisting in their pursuit of developmental goals.

To ensure the survival and development of businesses, entrepreneurs need to act decisively and promptly, with wise decisions and strategies and a long-term vision.

At the same time, they should continue to be a pioneer in promoting innovation with a focus on digitising business operations and creating landmark changes to bring about new values ​​and more profits for enterprises.

Thereby, enterprises will have the foundation and motivation to overcome hardships during the pandemic and continue to seize opportunities and gradually participate in and move up the ladder in the global value chain.

99,000 was the number of newly established enterprises in the first nine months of 2020 with a total registered capital of VND1,428 trillion dong. Of which, the average registered capital of a newly established enterprise in the nine months reached VND14.4 billion, up 14.4% over the same period last year.

In addition, 34,600 enterprises have returned to operations, up 25.5% over the same period last year, bringing the total number of newly established enterprises and enterprises resuming operations to 133,600 in the nine-month period, up 2.9% over the same period in 2019.

Conference boosts Vietnam-Germany trade, investment promotion

A virtual conference on trade and investment promotion between Vietnamese and German enterprises was held on October 15.

Speaking at the event, jointly held by the Trade Office at the Vietnamese Embassy in Germany and the Ministry of Industry and Trade’s Trade Promotion Agency, Vietnamese Ambassador Nguyen Minh Vu stressed the bilateral cooperation has been expanded in many fields and seen remarkable achievements, especially after the two countries upgraded their ties to the strategic partnership level in 2011.

Germany has been one of Vietnam’s most economic partners in the European Union for years, with two-way trade hitting 14 billion EUR (16.39 billion USD) in 2019 – a fourfold increase compared with that of 2009.

Germany is one among four EU nations investing most in Vietnam with 361 valid FDI projects.

Meanwhile, Vietnam is among Germany’s three biggest economic partners in ASEAN, Vu stated.

He stressed that the EU-Vietnam Free Trade Agreement, which has become effective, and the pending EU-Vietnam Investment Protection Agreement will open up brighter prospects for economic collaboration between the two countries.

The diplomat expressed his hope that through the conference, participating enterprises will build up substantial and win-win cooperation to bring into full play opportunities brought about by the bilateral relations.

Director of the Trade Promotion Agency Vu Ba Phu affirmed that his agency always supports efforts to boost Vietnam-Germany trade cooperation, and well do its role as a bridge connecting the two countries’ businesses.

Participating enterprises from both sides share experience in opportunities and challenges brought about by the EVFTA./.