Do not let bad debt arise from real estate projects
At the 2023 Annual General Meeting of Shareholders of Military Commercial Joint Stock Bank (HoSE: MBB), bank shareholders raised questions about the bank's high real estate lending volume and how it affects MB's operations in the context of this sector facing many difficulties.
Responding to shareholders, MB Bank's Permanent Deputy General Director Pham Nhu Anh emphasized that the amount of real estate loans includes real estate business loans and personal loans for home purchase. If we add personal loans for home purchase at MB, the amount of real estate loans is high but does not reflect the true nature.
Currently, the proportion of real estate loans at MB accounts for 7.8% of the total loan scale, among the lowest banks in the market.
In addition, MB shareholders also questioned the scale of loans and outstanding bonds of real estate enterprises Novaland , Hung Thinh, Trung Nam at the bank, and the upcoming orientation when the group of corporate customers as well as strategic partners Novaland are facing problems.
Permanent Deputy General Director Pham Nhu Anh explained that with Hung Thinh Group, MB does not lend for real estate projects, does not own bonds, but does lend a small part of the construction sector.
“Novaland is a major real estate partner, MB lends and issues bonds to Novaland. However, we manage and evaluate specific projects. Currently, Novaland's corporate bond balance has decreased significantly, not as much as at the beginning of the year. MB lends and manages all of these projects to contractors and individual customers,” Mr. Anh affirmed.
Currently, MB is still managing the money in the account to recover enough principal and interest at Novaland and is expected to have no bad debt pressure in 2023.
With Trung Nam, Trung Nam's loans and bonds are being allocated by MB to renewable energy projects and are still fully paid at the present time, with no bad debt in 2023 and the following years.
In addition, shareholders also raised questions about MB's relationship with Novaland when this bank is lending up to VND9,428 billion at the parent bank and adding to its subsidiaries, which could amount to VND10,000 billion, while the bank's current charter capital is at VND45,000 billion, accounting for nearly 20% of capital.
Novaland's audited consolidated financial statements for 2022 show that Novaland has 14 loans with MB, including short-term (VND 150 billion), long-term (VND 3,100 billion) and bonds (VND 6,178 billion).
Chairman Luu Trung Thai explained that MB participates in not just one but many Novaland projects, the total scale of loans and bonds does not reach the figure of 10,000 billion VND as mentioned by shareholders.
"MB controls the real estate business loan ratio at about 8% of total loans. Real estate projects, not just Novaland, all have collateral, so there will be no bad debt this year," he said.
The Chairman also affirmed that MB has no special priority for Novaland, the bank has no investment in Novaland and is only the 4th - 5th largest creditor in lending to Novaland.
Talking about MB's huge guarantee balance, Mr. Thai shared that the bank's guarantee balance is approximately 18,000 billion VND, of which there are no bond guarantees, mainly oil market guarantees and partly payment guarantees.
MCredit sets profit target of 1,300 billion VND
In addition, MB shareholders also raised many questions about whether MCredit's bad debt increased sharply and affected the Group in the context of consumer borrowers having difficulty paying debts after the Covid epidemic and many debt collection companies being investigated by the police, leading to many people intentionally defaulting on their debts.
Regarding the issue of bad debt in consumer loans, Ms. Vu Thi Hai Phuong - Vice Chairwoman of MB's Board of Directors said that the bank has restructured MCredit by optimizing operating costs, increasing revenue, controlling debt collection, debt collection, building a new strategy for the next phase and repositioning the brand in the market.
After 3 years of restructuring and 2 years of the Covid pandemic, in 2022, MCredit entered the top 3 market share. CIR reached 29.4%. NIM reached 21.1%, leading the consumer finance industry. Notably, it also ranked 2nd in the industry's profit with 1,200 billion VND, just after Home Credit. Bad debt is still following the strategy of below 6% even though the industry average is over 8%.
Ms. Vu Thi Hai Phuong - Vice Chairwoman of MB Board of Directors.
This year, MCredit aims to make a profit of VND1,300 billion in the face of difficulties in the consumer lending sector. In addition, MB will continue to increase its market share and focus on the important customer segment of low-income customers. In the first quarter of 2023, MCredit recorded a profit of more than VND300 billion.
"MCredit's debt collection strategy is humane debt collection. Currently, there are more than 1,000 debt collection staff, including 600 collaborators. We do not support debt collection according to black credit, not under the control of State agencies," the Vice President emphasized .
Source
Comment (0)