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Rise in loans to boost Vietnam’s PVFC earnings in ’09

 


October 29, 2008

Rise in loans to boost Vietnam’s PVFC earnings in ’09

State oil group Petrovietnam's financial arm, PVFC, 10 percent owned by Morgan Stanley, said on Tuesday it expected strong lending to boost net earnings next year by about a quarter to 893 billion dong ($54 million), reported Reuters.

The company, which acts as a de facto bank for Petrovietnam, said last week it aimed to raise $900 million by listing all of its 500 million shares on Nov. 3 on the Ho Chi Minh Stock Exchange.

PVFC's revenue is forecast to jump 36.6 percent next year to 6.83 trillion dong from the 5 trillion dong expected this year, the Hanoi-based company said in a business plan seen by Reuters.

It said bad debt now accounted for about 2.7 percent of outstanding loans of around 20.9 trillion dong ($1.26 billion), down from 5.91 percent in March this year.

The company, 78 percent owned by state oil monopoly Petrovietnam, forecast credit growth would average 36 percent per year in the 2008-2012 period.

Loans would rise to 25.17 trillion dong by the end of 2009 from 20.9 trillion now, it said.

Last year Morgan Stanley paid nearly 70,000 dong per share, about $215 million in total, to buy 10 percent of PVFC.

PVFC shares have since tumbled in the unregulated, unofficial market to around 30,000 dong each, mirroring a slump in Vietnam's stock market as the economy struggles with months of double-digit inflation and a soaring trade deficit.

Company officials have said PVFC has been working with Morgan Stanley to complete procedures to list its shares in Singapore next year.

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