Data of Rong Viet Securities (VDSC) on outstanding corporate bonds (excluding bonds issued by credit institutions) at 10 banks shows that, in 2018, outstanding loans of economic organizations reached 149.4 trillion, down slightly by 0.8% compared to the end of 2017, accounting for 4.0% of total credit of banks.
In the first 6 months of 2019, the total outstanding loans of economic organizations in these 10 banks reached 152.3 trillion dongs, only increasing by 2% compared to the beginning of the year, much lower than the average credit growth rate. of these 10 banks (8.1% compared to the beginning of the year).
Outstanding loans of economic organizations did not change much in most banks. However, especially, only two banks have clear investment expansion in economic organization bonds: MBB (+ 78.7%), and TPB (+ 25.3%) - these are also two of the three banks with the strongest credit growth in the first half of 2019 (respectively 13.9% and 15.9%, after VIB).
Thus, until June 2019, most banks with a moderate proportion of corporate institutional bonds were around 2-4% of outstanding loans. The two banks with the lowest proportion are ACB (without outstanding loans of economic organization bonds) and VCB (1.1% of credit). The three banks with the largest proportion of investment in bonds of economic organizations include TCB (60.7 trillion, accounting for 24.7% of outstanding loans), MBB (15.6 trillion, accounting for 6.1% of outstanding loans) and TPB (6.4 trillion, accounting for 6.7% of outstanding loans).
In the first half of 2019, TCB bought over 2 trillion bonds of Tan Lien Phat Saigon Real Estate Trading Co., Ltd. MBB and MBS also bought 200 billion dong of bonds from Novaland in May, and 550 billion dong of bonds issued by Phat Dat Real Estate in June. Therefore, in the list of bonds organized by economic organizations of banks, this is most likely to have more bonds related to the real estate sector.
VDSC said that, with common interest rates at 9% / year or more (even higher for companies in the real estate sector), corporate bond yields are usually better than bonds promissory notes issued by the credit institution (interest rate about 6-8%).
Therefore, the two banks with the highest proportion of debt stock investment in bonds of economic organizations also have a much higher return on debt stock investment than the common level (TCB 8.1% per year, TPB 7.9% per year). On the contrary, it is easy to see that banks such as ACB and VCB have safer debt securities investment structure than other banks and also have lower debt securities yields (below 6%).
In addition, the trend of underwriting bonds via securities companies and then redistributing them to individual investors is also becoming common. For TCB, most of economic organization bonds are invested through TCBS, after which TCBS will split and resell to retail customers. Similarly, MBB is also aiming to distribute bonds (G-bond products).
After the bank resells, the risk will be passed on to secondary buyers. For this operation, the bank collected bond issuance advisory fee and bond distribution fee (for resale to individual customers).