The 10-year-ago crisis had exposed many weak banks. Until now, many weak banks are still waiting for the rescue. Others are struggling to get rid of the burden of non-performing loans. Shareholders and employees of these banks are also heavily affected.
While many entrepreneurs in weak banks go to jail for their wrongdoings, a few others are determined to overcome difficulties. Typically, there are Mr. Duong Cong Minh (restructuring Sacombank), Mr. Do Minh Phu (restructuring TienPhongBank), and Mr. Do Quang Hien (restructuring of Habubank). Of course, only when they see the potential of gaining benefits do they take action. However, they deserve to be appreciated by society, thanks to their contributions to enhancing the banking system, ensuring employment and shareholders’ benefits.
The first period was very difficult for SHB. Mr. Do Quang Hien's SHB immediately recorded a loss of up to 1,700 billion dong in the third quarter of 2012 after the merger of Habubank in August. The NPL ratio rose from 2.2% to 13.2%, not to mention potential non-performing loans and the pressure to withdraw accrued interest.
However, in recent years, SHB's profits have been recovered to a commensurate level with the scale of the bank. The non-performing loan is forecasted to be resolved completely this year or next year. In other words, it takes 8 - 10 years for the banks to solve the crisis left by the merger and enjoy the fruits of their efforts.
Officially holding power at Sacombank from June 2020, Mr. Duong Cong Minh set out four main tasks for successful restructuring.
One: Rebuild the organizational management model, rearrange all personnel of Sacombank.
Two: Rebuild all the regulations and business processes of Sacombank in accordance with the stage of restructuring and improving management and administration.
Three: Develop business and improve labor productivity.
Four: Solve non-performing loan (NPL) actively, bringing the NPL ratio below 3% after 5 years.
After nearly 3 years, Sacombank's strength and position have been significantly improved. However, the essential goal of bringing the NPL ratio below 3% after 5 years still faces many challenges.
As of June 30th, 2020, the NPL ratio of Sacombank was 2.15%. However, this ratio was up to over 10% including unprocessed non-performing loans at VAMC. The bank also bore the pressure of withdrawing accrued interest.
Compared to Mr. Do Quang Hien and Mr. Duong Cong Minh, Mr. Do Minh Phu experienced a quicker recovery from TP Bank.
As of February 29th, 2012, TienPhongBank (former name: TPBank) fell into a crisis of liquidity loss, accumulated loss of 1,360 billion dong, or nearly half negative equity. The non-performing loan at that time was 6%, on the verge of losing the charter capital. Therefore, the need for restructuring was essential.
However, at the end of 2012, TPBank’s profit was 116 billion dong. From 2013 to 2019, the bank's average pre-tax profit growth was up to 75% p.a. In 2019, TPBank’s profit reached nearly 3,900 billion dong and was expected to exceed 4,000 billion in 2020 despite the impact of the Covid-19 pandemic.
It can be seen that reviving the banking industry is full of challenges and bankers are heroes of the industry
The data shows that as of September 14, 2020, credit institutions have restructured the repayment terms for over 271,000 customers with a total outstanding of 321,000 trillion dong according to Circular No. 01/2020/TT-NHNN. It is also shown that there is no wave of banking employee layoffs during the pandemic. This is an enormous effort in the banking industry.
The above achievements are worthy of recognition and the bankers, who have contributed to the economic recovery over the Covid-19 pandemic, deserve to be honored by society.
Translated by VietnamCredit