Eximbank, allies seek to oust management at Vietnam's Sacombank

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Vietnam Export-Import Commercial Joint Stock Bank, the country's fifth-largest publicly traded lender, is leading shareholders of Saigon Thuong Tin Commercial Joint Stock Bank who are calling for a new management board.

The lender known as Eximbank, which owns 9.7 percent of Sacombank after buying a stake from Australia and New Zealand Banking Corp. last month, criticized recent transactions including a 100 million-share buyback in a Feb. 17 letter to the chairman and supervisory board head of Sacombank, as it's also known. Eximbank, which says it represents shareholders who own more than 51 percent of Sacombank stock, said Vietnam's fourth- largest publicly traded lender by assets isn't as efficient as similarly sized banks.

"It is unusual to see this in Vietnam," said Karolyn Seet, a Singapore-based assistant vice president at Moody's. "It is worrisome, and questions how well a bank can function moving forward if there are all these disputes."

Pressure on the management of Vietnamese banks has increased as the government seeks to control risks in the sector that may threaten the economy. Prime Minister Nguyen Tan Dung this month told the central bank to "solve" a shortage of funds among lenders by the end of March. The State Bank of Vietnam is limiting loan growth in an attempt to ease funding among banks, minimize bad debt and boost investor confidence.

Eximbank Chief Executive Officer Truong Van Phuoc declined to comment on the letter when contacted by Bloomberg News. Sacombank Chairman Dang Van Thanh and Chief Executive Officer Tran Xuan Huy couldn't be reached on their mobile or office phones.

Stake sales

Sacombank's management board represents "a small part of the company's shareholders," following sales of stakes by ANZ, Dragon Capital Group Ltd., and Refrigeration Electrical Engineering Corp., Eximbank said in the Feb. 17 letter. Eximbank holds the largest stake in Sacombank, according to data compiled by Bloomberg from the lender's latest filing.

The shareholders also asked Sacombank to increase its 2012 profit target by at least 15 percent to 4.025 trillion dong ($193 million).

Sacombank had VND150.5 trillion of total assets on Sept. 30, compared with VND146.9 trillion at Eximbank, according to figures from the banks' earning reports filed to the Ho Chi Minh City Stock Exchange.

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