Inspectors discovered a series of violations at VietBank Long An

The newly announced inspection conclusion from the State Bank of Vietnam (SBV) Region 13 Branch clearly pointed out a series of violations in credit activities at Vietnam Joint Stock Commercial Bank for Industry and Trade...

The newly announced inspection conclusion from the State Bank of Vietnam (SBV) Branch Region 13 pointed out a series of violations in credit activities at Vietnam Thuong Tin Commercial Joint Stock Bank - Long An Branch (Vietbank Long An ). Although recording some positive results in operations, the inspection also pointed out a series of serious violations in credit granting activities, capital usage supervision and collateral asset valuation.

According to Inspection Conclusion No. 03/KL-TTRA issued on July 18, 2025 by the Chief Inspector of the State Bank of Vietnam, Region 13, Vietbank Long An maintains stable operations, capital sources and capital use indicators tend to increase over the years, and business operations are profitable. The bank basically complies with legal regulations in the fields of capital mobilization, opening payment accounts, providing card services and anti-money laundering. However, in addition to the achieved results, the inspection process has discovered many worrying violations in credit granting and credit risk management activities.

Specifically, Vietbank Long An has allowed customers to use loans for purposes other than those committed, seriously violating the provisions of Clause 2, Article 4 of Circular No. 39/2016/TT-NHNN. Although the unit conducted post-disbursement inspections, it did not properly assess the actual situation of capital use and did not detect cases of customers using capital for purposes other than those committed.

The Inspector emphasized that this violation is the direct responsibility of the borrower who used the loan for the wrong purpose; the person assigned to inspect and supervise the loan; and the general responsibility of the Unit's leaders in the management work.

In addition, the branch's loan appraisal and approval process is assessed as not being strict, the reason is that the unit has not fully recognized and implemented its responsibilities in loan appraisal and approval. The ability to analyze and evaluate of appraisal staff is still limited, not strictly following internal regulations leading to violations. In addition, customers operating small-scale production and business with low professionalism have difficulty in preparing and providing documents proving eligibility for loans to the bank.

The inspector also pointed out violations at Vietbank Long An in determining the loan term and amount that were not suitable for the business cycle, capital recovery period, and debt repayment capacity of the customer. The unit also assessed the loan amount as not suitable for the customer's capital use plan; incompletely collected information and documents related to the debt repayment source. The customer's capital use plan was the basis for assessment and loan decision.

Regarding the inspection of loan use, the unit conducting the inspection and supervision of customers' loan use is not strict according to Vietbank's internal regulations. The inspector clearly stated that the inspection and supervision of customers' loan use is sometimes subjective, lacks thoroughness and is formalistic. In addition, most individual customers or small-scale production and business households have difficulty in providing documents proving the purpose of loan use according to regulations.

Direct responsibility in this matter belongs to the person participating in loan appraisal and approval; general responsibility belongs to the Unit's leadership in operations.

In particular, the inspector also discovered that Vietbank Long An established a mortgage contract for property rights arising from the Land Use Rights (LURC) Transfer Contract, agreeing on a value of collateral (LS) with customers much higher than the transfer price of LURC stated in the notarized LURC Transfer Contract and the customer's Deposit Contract. The seizure of collateral in some cases did not comply with internal regulations, which could lead to legal risks if a dispute arose.

According to the inspection agency's assessment, the violations discovered through the inspection were not serious, but led to some risks in lending, the bad debt ratio increased higher than the recommended level of the State Bank. If not rectified, seriously handled and promptly remedied, it will continue to affect the credit quality of the Unit in the coming time.

Based on the inspection conclusion, the Chief Inspector of the State Bank of Vietnam Region 13 requested the Director of Vietbank Long An to review the responsibilities of individuals and groups involved. At the same time, this unit must fully implement the 4 recommendations and 3 recommendations to overcome existing shortcomings and limitations in order to continue to maintain safe, effective and legal operations.

Regarding business performance, according to the latest published financial statements, in the first quarter of 2025, net interest income - VietBank's main source of revenue - reached nearly VND 703 billion, a sharp increase of 56% compared to the first quarter of 2024. However, non-interest income sources remained modest and showed signs of decline. Service income in the period decreased by 10%, and foreign exchange income decreased by 2%. In contrast, income from trading securities increased sharply by 49%, helping to partially offset the decline in other segments.

Total operating expenses in the quarter reached VND398 billion, up 14% year-on-year. After deducting expenses, VietBank recorded net profit from business activities of nearly VND367 billion, up 2.2 times; pre-tax profit reached more than VND248 billion, 3.4 times higher than the same period last year.

With this result, VietBank has completed about 14% of the pre-tax profit target for the whole year 2025, set at VND 1,750 billion.

In terms of asset size, by the end of the first quarter of 2025, VietBank's total assets reached VND174,377 billion, up 7% compared to the beginning of the year. Outstanding loans to customers reached VND97,298 billion, up 4%, while deposits at other credit institutions increased sharply by 29% to VND43,917 billion. Deposits at the State Bank decreased by 60% to VND2,840 billion, reflecting the strategy of optimizing cash flow to serve credit and investment activities.

Notably, the bad debt ratio has decreased slightly from 2.75% to 2.64%. The bank has also increased its credit risk provision to over VND118 billion (up 31%).

At the recent Annual General Meeting of Shareholders, VietBank approved a plan to increase its charter capital from VND7,139 billion to nearly VND10,920 billion in 2025, through two share issuances. According to the bank's leaders, the capital increase will help improve the capital adequacy ratio (CAR) to about 13%, while creating a foundation for expanding scale, enhancing competitiveness and promoting digital transformation in the coming period.

Source: https://baolamdong.vn/thanh-tra-phat-hien-hang-loat-sai-pham-tai-vietbank-long-an-384265.html