Credit control is not strict, capital is used for the wrong purpose
On June 3, 2025, the Chief Inspector of the State Bank of Vietnam, Region 9, issued Inspection Conclusion No. 74/KL-TTNH for Saigon Thuong Tin Commercial Joint Stock Bank - Da Nang Branch (Sacombank Da Nang). The inspection period is from January 1, 2023 to February 28, 2025.
The inspection content includes: credit granting activities; debt classification, provisioning and use of reserves to handle risks; handling bad debts and recovering off-balance sheet debts after handling risks; compliance with legal regulations on preventing money laundering and combating terrorism; foreign currency trading activities; money transfer activities abroad; insurance agents.
According to the conclusion, during the inspection period, Sacombank Da Nang had a stable increase in assets and mobilized capital. Total assets increased by 2.31% and 2.51% respectively compared to the end of 2023 and 2024. Mobilized capital increased by 3.96% compared to the end of 2023, mainly from market 1.
However, the inspection team discovered that there were still many violations and limitations in credit granting activities at the branch such as: Inadequate customer legal documents; not strict loan appraisal and approval work; not strict inspection and supervision of loans.
In addition, the branch has not closely monitored cash flow arising from sponsorship deals, there is a situation of using loans for the wrong purpose, and has not registered to change the content of the guarantee measure after the guarantee assets have been completed.
The Inspectorate also pointed out many cases where documents proving the purpose of capital use were not complete, and the appraisal of assets was not in accordance with the actual status.
High risk potential, urgent need to overcome
Notably, the inspection team identified 4 customers in the group with high-risk financial structures. Sacombank Da Nang is required to strengthen financial supervision and strict credit control. Request customers to provide full financial reports to accurately assess their repayment capacity and actual cash flow. At the same time, review key financial indicators to provide early warnings. In case of detecting high risks, banks need to proactively adjust the limit or consider early debt collection.
Regarding credit quality, outstanding loans increased slightly by 0.92% compared to the end of 2023, bad debts at branches have decreased significantly, from VND 125.36 billion, to VND 59 billion, equivalent to a decrease of 1.87% to 0.87% of total outstanding loans. Group 2 debt also decreased sharply by 72.15%.
The total difference in revenue and expenditure in 2024 will reach 214.87 billion VND, a slight decrease compared to 2023, but the branch will still maintain stable operations, mainly thanks to revenue from credit granting. Currently, the branch has a total of 180 staff, of which 5 have master's degrees and 140 have university degrees.
Based on the inspection results, the inspection team requested Sacombank Da Nang to report and explain the shortcomings, violations and limitations; at the same time, rectify and urge Sacombank Da Nang to promptly propose measures to prevent, overcome shortcomings, violations, limit and minimize risks in banking operations.
The Chief Inspector of the State Bank of Vietnam, Region 9, has requested Sacombank and Sacombank Da Nang to fully implement 11 recommendations to overcome shortcomings and limitations, ensure safe and effective operations and comply with legal regulations.
