Local banks licensed for gold bar trading have yet to make gains from this business, with some even having incurred losses due to stringent trading regulations of the State Bank of Vietnam.
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Trinh Van Tuan, chairman of Orient Commercial Bank (OCB), said that gold bar transactions have been dreary in recent days, partly because OCB has never provided this service before. Besides, demand has plummeted sharply as gold prices have stabilized.
Although this business has yet to generate profits, OCB will continue it and offer a new product for customers. OCB has not taken gold trading into account in this year’s profit target, Tuan said.
Another banker in HCMC told the Daily that his bank has been trading gold for a long time. However, this business has declined since last year as the bank has run out of gold liquidity.
Some customers have come to transact with the bank after it had got approval to trade in gold bars. To sell gold bars to clients, a branch like his must contact the head office to buy gold, making transactions more time-consuming and costly. As a result, his bank branch sees no profits from transactions and even incurs losses due to the cost of transport from the head office to the branch.
Some customers have complained about slow service. Therefore, the bank only sells gold to keep clients rather than to make a profit, the banker said.
The bank branch has seen just small transaction volumes in recent times at below 10 taels each as there are just a few sellers. When the branch has bought gold, it has to sell to the head office to prepare statistics as required by the central bank.
Earlier, this branch was given 100 gold taels as an available balance to facilitate trading. But now, staff members are reluctant to carry out gold transactions with customers due to the complicated procedure, the banker added.
Meanwhile, deputy general director of a small bank has also seen gold bar trading unprofitable due to strict trading regulations.
As banks are required to keep their gold position not exceeding 2% of their chartered capital and obtain a positive position with gold by the end of each day, each transaction is strictly supervised by the head offices. Customers have felt unpleasant at slow service while the transaction time at banks is restricted.
Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said this agency has yet to receive any complaints about gold bar trading from banks and the gold market has seen relative stability. However, banks that have never provided gold trading service before still need more time to familiarize themselves with this business.