Bolstering position and prestige in the funding

THUY TUOI

Bolstering position and prestige in the funding market

On 12 August 2021, BIDV - SuMi TRUST Leasing Company Limited (BSL) and Taiwan Shin Kong Commercial Bank - Hong Kong Branch officially signed a Facility Agreement for an offshore loan of USD5 million, term of 364 days. This is the first unsecured committed loan between the two parties.

In the context of the Covid-19 pandemic having negative impacts on the global financial market, the above unsecured credit limit has demonstrated the confidence of Shin Kong Bank in BSL’s governance, financial capacity, and prestige as well as growth prospects. The loan contributes to enhancing BSL’s working capital for financial leasing activities. Up to now, the total loan and deposit limit granted to BSL by domestic and foreign financial institutions has been more than VND2,500 billion (equivalent to USD 107 million).

Based on advanced risk management and governance, fast growth and good asset quality, BSL has progressively gained market trust. In addition to the credit line establishment rooted from the confidence of financial institutions worldwide, BSL has signed strategic cooperation agreements with more than 50 big-name suppliers in the fields of construction machinery, machine tools, transport vehicles, office equipment, including the world's leading partners. Number of clients using financial leasing services provided by BSL has grown rapidly, reaching over 400 ranging from microsized to large-scale operations.

As of 30 June 2021, BSL's financial leasing outstanding balance reached VND2,390 billion (USD104 million), up 47 percent compared to 30 June 2020; total assets hit VND2,627 billion (USD114 million), up 48 percent compared to 30 June 2020; bad debt at ~0.5 percent. Operational safety ratios and risk management limits comply with the State Bank of Vietnam’s regulation and the risk appetite issued by the Board of Members. According to the business plan for 2021, BSL is set to achieve a financial leasing balance of about VND3,000 billion (USD130 million), up 38 percent compared to 31 December 2020 with a bad debt ratio not exceeding 2 percent.

Building on the solid foundation and strengths, along with the trust and support by Vietnamese and international financial institutions, BSL is confident to achieve the goal of being top 3 largest financial leasing companies in Vietnam by market size in the period 2021-2023.

BSL and Taiwan Shin Kong sign the facility agreement via an online ceremony

Taiwan Shin Kong Commercial Bank is ranked 440th in the world Top 1000 banks (by Tier 1 capital as of December 2020) with total assets and equity reaching USD36.8 billion and USD2.4 billion, respectively, as of 31 December 2020. Taiwan Shin Kong Commercial Bank is a subsidiary of Shin Kong Financial Holding, and was established in 1966 with 104 branches in Taiwan and 1 foreign branch and 2 representative offices abroad.