Standard Chartered muscles up support for ACB

“I’m pleased to say that in 2013 Standard Chartered will be adding senior resources to assist ACB,” said Julian Fong Loong Choon, a high-ranking executive from Standard Chartered, which holds a 15 per cent stake in the Vietnamese bank.

“This will be in the areas of strategy, financial markets, risk management and controls, business development and re-organisation,” he told ACB’s extraordinary general shareholders meeting in Ho Chi Minh City December 26.

“There is still some work to be done but I believe ACB will continue to be one of Vietnam’s best banks,” he said.

ACB, one of Vietnam’s largest lenders, faced a crisis after the August arrests of former vice chairman Nguyen Duc Kien and CEO Ly Xuan Hai for alleged wrongdoings in their business practices,  and the later resignations of three other top officers.

Followings the two arrests, ACB chairman Tran Xuan Gia and his deputies Le Vu Ky and Trinh Kim Quang stepped down. In September, police started investigations of their alleged deliberate violations of State regulations on economic management causing serious consequences. They are facing charges for their connections to Huynh Thi Huyen Nhu, former executive of a branch of state-run VietinBank, and her accomplices who were alleged to have expropriated VND718 billion ($34.5 million) from ACB.

At ACB’s extraordinary general shareholders meeting December 26, Fong said ACB has emerged from these difficulties.

“ACB has a strong balance sheet. It continues to be a very liquid bank. It’s re-organising to strengthen risk management, financial controls and improving branch productivity and efficiency,” said Fong, a Malaysian national who was named a deputy chairman of ACB in September after Ky and Quang resigned. Meanwhile, Tran Hung Huy, the son of well-known ACB co-founder Tran Mong Hung, was appointed as ACB’s new chairman.

“As an ACB strategic partner, Standard Chartered has supported ACB through the last few months. And we’ll continue to do this,” said Fong.  

Luong Van Tu, former deputy trade minister and chief of the Vietnamese delegation for World Trade Organisation accession six years ago, was elected as another deputy.

The August arrests of Kien and Hai prompted many depositors to pull their money out of ACB. The bank’s new chairman, Huy, told the assembled shareholders that up to VND28 trillion ($1.346 billion) was pulled out of ACB in the third quarter of 2012, but the lender had overcome the incident due to timely support from the State Bank of Vietnam and other lenders, as well as efforts by the ACB staff.

“But we’ve also gained more customer confidence. In addition to those who took their money out, tens of thousands of customers have continued to deposit more money,” said Huy.

Huy’s father - Hung, Vietnam Eximbank’s former chairman Nguyen Thanh Long, ACB deputy CEO Dam Van Tuan, and Tran Trong Kien, chairman and CEO of Thien Minh Tourism, were elected to the board during the shareholders meeting. Hung served as ACB CEO from 1993 to 1994, then chairman between 1994 and 2008.

ACB CEO Do Minh Toan said the bank estimated its 2012 profit at VND1.2 trillion (almost $57.5 million), much lower than the VND5.5 trillion ($264.4 million) target set in the beginning of the year. However, the bank plans to pay dividends of 10 per cent, with the portion of cash and shares to be decided by the State Bank.

Asked by shareholders to reveal losses from gold transactions in the third quarter, Toan said the losses were about VND1.700 billion ($81.7 million) and ACB had stopped gold transactions following the enactment of the State Bank’s tighter regulations on bankers’ gold-related business as of November 25, 2012. He added that from early 2010 to August of 2012, gold-related business at ACB brought to it VND2,381 billion (about $115 million) in profit, and the difference between the two figures also meant profit.

Regarding VND718 billion ($34.5 million) allegedly expropriated by Nhu of VietinBank, Toan said policemen were investigating the case.

On behalf of former chairman Gia and former deputy chairmen Quang and Pham Trung Cang, former deputy Ky explained to the shareholders meeting that the four were in 2010 involved in authorising ACB employees to deposit funds at different banks to enjoy deposit rates higher than the cap imposed by the central bank, following proposals by then CEO Ly Xuan Hai.

 “At that authorising point of time, March 22, 2010, we [the four persons] approved the proposals because we were aware that this approval was not illegal as Hai proved it was legal. This approval was public and transparent,” Ky declared.

“At that time, such authorisation was very popular. Therefore, many other banks did this like ACB, and Huyen Nhu swindled those banks doing this as she did with ACB. Making this approval, we had no personal interests. All profits from the ACB deposits and from deposit rate differences went to ACB books.”

The chief of ACB’s internal auditing unit confirmed that all profits from the deposits and from deposit rate differences had put into the bank’s books.