Bank lent nearly half of authorized capital to single project: inspectors

VietABank, National Citizen Bank, Techcombank, BacABank, and Sacombank committed the infractions between 2013 and 2017.

They provided large loans for a single project though the laws cap lending to any single customer at 15% of their authorized capital.

But they merely bent rather than break the rules by lending to multiple companies which then purchased shares in a large project.

Sacombank, for instance, gave nine businesses a combined loan of VND9.26 trillion during the period under investigation (2013-2017), or 48.5% of its capital.

They were are in the property and construction businesses, and used the loans to invest in a single project, the Saigon Binh An urban area in what is now HCMC’s Thu Duc City.

Sacombank only evaluated the nine borrowers individually and not the developer of the project, which posed a risk, investigators said.

The businesses had used assets at the Saigon Binh An project as collateral though they had yet to acquire all legal documents related to their ownership.

Techcombank had provided loans of nearly VND20.1 trillion to seven businesses, who then bought shares in the developer of the Vinhomes Ba Son – Golden River luxury property project in HCMC’s District 1.

It had not been thorough in evaluating the borrowers, and not sure whether the borrowers would follow through with their payment commitments.

The project has yet to get off the ground and its construction license has expired, but Techcombank has yet to re-evaluate the loans and its ability to collect them.

But it said that as of now the bank no longer record any outstanding value of the mentioned loans and there are no risks involved.

BacABank had given loans to some subsidiaries of milk producer TH though they were not eligible, and some other customers were not financially capable of repaying but it gave them loans anyway.

Similar violations were found at NCB, which accepted stocks as collateral without carefully assessing their worth.

In some cases it did not evaluate the financial status of the borrowers or their ability to complete a project in time.

But the lender said of the six customers the investigators had examined, five have completed their payment obligations while the sixth has paid 90% of the loan.

VietABank was found to have given loans to property developers not capable of completing their projects and without government permits for them.