Saigon Commercial Bank assures liquidity after run on deposits

The panic was sparked over suspicions of the bank’s ties with real estate tycoon Truong My Lan arrested on suspicion of financial fraud.

The SCB has increased funds at all its transaction branches as well as its deposits at the State Bank of Vietnam (SBV), the country’s central bank, to ensure payments, including interbank payments, Hoan said at a Saturday press briefing in Ho Chi Minh City. Hoan is in charge of the bank that currently has no CEO.

“We have also worked regularly and continuously with the SBV and relevant ministries and sectors to ensure stable operations of SCB,” he said.

At the press briefing, Vo Minh Tuan, director of SBV’s HCMC Branch, said: “We urge people not to panic and withdraw money early (before term deposits mature) and lose their benefits. If deposits are withdrawn before maturity, the interest rate is less than 1%, while the rate for a term deposit is up to 7% a year.”

The SCB affirmed that Truong My Lan, chairwoman of property developer Van Thinh Phat Group, who was arrested for alleged fraud related to issuance and trading of bonds worth trillions of dong (VND1 trillion = $41.87 million), does not hold managerial or executive positions at the bank.

It also noted that the An Dong Investment Corporation, a real estate firm under the Van Thinh Phat Group, which is linked to Truong My Lan’s violations in the issuance and trading of bonds, was not a shareholder of the bank.

The above-mentioned cases have not affected normal operations of SCB, the bank said, assuring that it has adequate solutions and resources to ensure the rights and interests of its depositors as well as partners and customers.

An SCB board member Nguyen Tien Thanh, also chairman and CEO of Tan Viet Securities Joint Stock Company, died late Thursday. He was just 50. His sudden death also caused panic among depositors.

SBV deputy governor Dao Minh Tu also advised depositors Saturday to consider the situation before deciding to withdraw their deposits, especially term deposits. He said withdrawing (term deposits) before maturity means customers will lose the interest they are entitled to. In all situations, the central bank will maintain stable and continuous operations of the SCB, and always ensure the safety of people’s deposits, Tu said.

The SCB, amalgamated by three banks, began official operations in January 2012. It is the biggest private bank by assets and a Top 5 bank in Vietnam.

As of Sept. 30, SCB had over 4,100 shareholders, including 7 foreigners holding 27.9%, 11 domestic institutional shareholders holding 15.7% and the remaining domestic individuals holding more than 56.11% of its charter capital.