Brian Jeffrey
Overview of Eximbank’s Journey
Founded in 1989, Eximbank holds the distinction of being one of Vietnam’s pioneering joint stock commercial banks. During the doi moi (renewal) period, it became a prominent player within the country’s financial sector.
Throughout its first decade, Eximbank grew significantly, amassing a charter capital of VND17.47 trillion and establishing a network of 216 branches across Vietnam.
Eximbank’s EIB shares once garnered considerable attention on the stock market, particularly after the prominent Japanese financial institution, Sumitomo Mitsui Banking Corporation (SMBC), invested $225 million in 2007 to acquire a 15% stake in the bank.
Challenges Faced by Eximbank
In recent years, however, the bank has encountered turmoil due to factional disputes among its major shareholders, leading to a decline in profits from VND4 trillion in 2011 to VND2.7 trillion in 2023.
The past decade has been described by local media as tumultuous, with the bank witnessing the replacement of nine presidents over ten years. Following the resignation of Le Hung Dung as chairman, several individuals have taken on leadership roles, including Le Minh Quoc and Do Ha Phuong, with Nguyen Canh Anh currently at the helm.
Each leadership turnover has been tied to intense power struggles among various shareholder factions.
As of January 2023, SMBC announced it was no longer a significant stakeholder in Eximbank, following the earlier divestment of Thanh Cong Group in October 2022.
Future Outlook for Eximbank
The ongoing shareholder conflicts have often led to unsuccessful meetings, causing Eximbank to be a focal point of discussion during such events.
Recent developments brought a glimmer of hope as Eximbank welcomed new major shareholders, Gelex Group with a 10% share and Vietcombank holding 4.51%.
A leaked document warning of serious operational risks at Eximbank raised concerns; however, the bank asserted that it did not originate from them and has not been validated.
On November 28, 2024, Eximbank plans to hold an extraordinary shareholders’ meeting in Hanoi to discuss the potential relocation of its headquarters from HCM City.
Analysts have speculated that this decision could significantly rejuvenate the bank, necessitating a well-planned restructuring strategy to address prevailing challenges and enhance risk management practices.
Eximbank could draw inspiration from TPBank’s turnaround after the DOJI Group’s investment and involvement in its restructuring. Effective management and aligned strategic partners were crucial in TPBank’s transformation.
The bank’s recent shareholder composition reveals Gelex, Vietcombank, and VIX Securities as the top stakeholders, alongside two individual shareholders, Luong Thi Cam Tu and Le Thi Mai Loan.
This streamlined shareholder structure, combined with a potential move to Hanoi, has sparked optimism among investors for Eximbank to move past its ‘decade of chaos’ and strengthen its leadership for future growth.
As of late Q3 2024, Eximbank exhibits strong potential, with total assets rising by 11% to VND223.683 trillion, outstanding loans climbing 14% to VND159.483 trillion, and mobilized capital growing 7% to VND167.603 trillion.
Furthermore, Eximbank reported a pre-tax profit of VND2.378 trillion in the first nine months of this year, marking a significant 39% year-over-year increase.
