The Board of Directors of the Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV , HoSE: BID) has just approved a plan to issue private bonds worth VND2,500 billion in 2023 with a par value of VND100 million/bond.
Expected to issue a maximum of 5 tranches, with the expected issuance volume of each tranche being at least 50 billion VND. Expected issuance time is from the third to fourth quarter of 2023. Bond term is from 1 to 5 years.
Interest rates are specifically determined for each issuance, based on market conditions, BIDV's ability to accept/capital needs at the time of issuance. Bond interest is paid later, annually or according to the bank's regulations at each issuance. Bond principal is paid once on the maturity date, except in cases where the bank buys back the bond before maturity or according to BIDV's regulations at each issuance.
The proceeds from the bond issuance are used by BIDV to lend to customers in the economy . These bonds are non-convertible, unsecured, and not a secondary debt of BIDV.
Regarding business performance, at the end of the second quarter of 2023, BIDV's net interest income and pre-tax profit reached VND 13,807 billion and VND 6,943 billion, respectively.
Accumulated in the first 6 months of the year, BIDV's pre-tax profit reached VND 13,862 billion, up 26% over the same period in 2022 thanks to a 30% decrease in risk provisions for the first 6 months, down VND 4,118 billion over the same period.
According to BIDV, in the first 6 months of this year, the bank shifted its operational structure towards sustainability, controlled credit quality according to targets, and reduced credit risk provisioning costs compared to the same period last year, which were the main reasons for the increase in profits. In addition, service activities and foreign exchange trading activities also achieved good growth.
Regarding loan quality, BIDV's total bad debt in the first half of the year was recorded at VND25,970 billion, up 47% compared to the beginning of the year, half of which was debt with the possibility of losing capital (group 5 debt) with nearly VND13,000 billion, up 10%.
In addition, substandard debt (group 3 debt) increased rapidly, up 2.5 times to VND 7,729 billion, doubtful debt (group 4 debt) also increased by 96%. The bad debt ratio increased from 1.16% to 1.59%.
As of June 30, 2023, the bank's total assets increased by 0.2% to VND2,124 trillion. Customer loan balance reached more than VND1,629 trillion, up 7% compared to the beginning of the year. BIDV's customer deposits grew by 5% in the first half of the year to more than VND1,545 trillion .
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