Saigon Thuong Tin Commercial Bank or Sacombank, listed on the Ho Chi Minh Stock Exchange under the ticker STB, is a commercial bank in Vietnam, established in 1991.
In 2015, Sacombank merged with Southern Commercial Bank, the latter known as Phuong Nam in Vietnamese, which was in distress without about 50 percent of its debts considered bad at the time. This merger had a huge impact on Sacombank’s business performance in the period from 2016 to 2023 as it needed to set aside provisions for, as well as process, these bad debts.
However, most of that assets have now been handled and the bank is expected to recover thousands of billions of VND in provisions between 2024 and 2026.
For example, in early 2024, Sacombank successfully auctioned Phong Phu Industrial Park for US$317.9 million. The park was encumbered by US$205.3 million in debt, dating back to 2011 and 2012, and was acquired by Sacombank in the aforementioned merger.
Sacombank has received 20 percent of the total amount to date and anticipates receiving the remainder within two years. Previously, Sacombank had put money aside to cover the Phong Phu Industrial Park debt. After selling the park, it should be able to repurpose these funds as well as make a profit on the sale.
Of note, in the first half of 2024, Sacombank’s total operating income rose by 3.6 percent year-over-year to US$565.2 million and profit before tax rose by 12.3 percent to US$215.2 million.
Net interest income rose by 4.1 percent, in line with the broader trend of growth seen across banks. This increase was driven by a stable macroeconomic environment and recovering credit demand. The credit growth of Sacombank reached 7 percent as of the end of the second quarter, slightly below the 7.6 percent average for listed banks.
Disclosure: The author does not have any financial interest in STB stock.