Bao Viet results a mixed bag

August 31, 2011 | 16:03

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Bao Viet Holdings yesterday announced its consolidated profit for the first half of 2011, with a decline on surging provisions for securities businesses.

The firm posted its first half consolidated pre-tax profit with an 8.5 per cent drop compared to VND665.01 billion ($32.4 million) from last year’s VND726.74 ($39.2 million), despite an increase of 19 per cent in revenue. The result made up some 46 per cent of the annual target.

Le Hai Phong, financial director for Bao Viet Holdings, said the drop was due to an increase in provisions in financial activities, particularly in securities business which was strongly impacted by market fluctuations.

Financial activities, which produce nearly a quarter of the group’s revenue, saw profit significantly down by 22 per cent from last year’s VND805.01 billion ($43.5 million) to VND662.48 billion ($32.3 million), despite a rise of nearly 13 per cent in revenue.

Bao Viet Securities Company, in which parent company Bao Viet owns 60 per cent, posted losses of VND80 billion ($3.9 million) within the first six months. The brokerage’s general director Nhu Dinh Hoa estimated the losses amounted to VND86 billion ($4.2 million).

Hoa admitted that a loss for the whole 2011 was “inevitable”, as the company still held shares that would be impacted by the market’s movements.

Phong said Bao Viet was trying shifting its securities investing into fix-income assets, adding that the group still had many ways to finance its operations.

He said the slight drop in profit within first six month was at an “acceptable” level, as the firm traditionally saw its business performing better in the year’s second half.

“We believe that the annual target will be reached,” said Phong.

By Hai Linh

vir.com.vn

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