Media Prestige and Volatility of Stock in Banking Sector

Based on the final result of the press, the Bank for Foreign Trade of Vietnam (Vietcombank) has been ranked as the leading prestige bank of 2015. In over 50 years of development, Vietcombank has made significant contributions not only to the stability and economic development of the country, but also to the community and society; Vietcombank has maintained their first ranking among credit institutions in Vietnam. In 2014, its key indicators were completed and exceeded. The credit balance increased by 17.68 per cent compared with 2013. Bad debts on December 31, 2014 were VND7,407 billion, at 2.29 per cent, down 0.4 per cent compared with the rate of 2013. The ROA and ROE reached 0.9 per cent and 10.5 per cent, respectively.

 

Top Five of this year are Vietcombank, Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Tien Phong Bank (TPBank), and Vietnam International Bank (VIB). These are all prestigious banks with high performance during the past period. Compared to the prestigious banks last year, the Top 10 banks this year have some new faces such as VIB, Maritimebank, and PVComBank.

 

The negative and positive statistics of the records of the banks by month are good; the positive statistics are greater than the negative statistics and the gap between the positive and negative lines tends to extend.

 

In particular, September, October 2014, and February 2015 are the bad periods when the positive and negative statistics were shrunk. The negative statistics came from the poor performance of some banks; particularly, there was slow-down of revenue, profits; bad debts and provisions remained high; and irregularities in lending activities and management of banks.

 

Since March 2015, the banking sector has obtained much good news. The banks have published positive financial information, growing revenues, low bad debts and more efficient management and human resources. In addition to the information related to the restructuring of the banks, the merger transaction brings bright spots and positive reviews for the sector, widening the gap between the two positive and negative statistics.

 

The top three prestigious banks of the media this year have stock prices fluctuating upward. This shows that during the last 12 months, these banks did not have too bad information that affected their credibilities in the eyes of shareholders and investors. Vietcombank is ranked the most reputable banks this year; the bank's share price has sharp fluctuation. On the stock market with the volatility counted per second, maintaining the stability of the stock price is a difficult thing so the growth of stock prices is considered a huge success of the bank which requires the banks to perform steady business results that creates a good image to the media. Similarly, the two stocks of Vietinbank and Sacombank reflect clearly the stability of the stock price of the two banks. It is also the second largest banks that prove their effective operations and long-term credibility.

 

According to the Vietnam Report, to improve the bank's reputation on the media, banks need to understand the importance of the transparency of information, not merely financial information, on all of their activities. This transparency is motivating the banks to perform better and to be more efficient. The transparency of information also includes the initiative of the banks in providing information to the press and other media means.

 

The second factor that contributes significantly to the best results of the banks is their absorbing external information. According to the reports, it was an interactive process between the bank and the community. The opinions and assessments of the community is the most reliable measure to evaluate the bank's reputation. The level of public trust will help the banks identify their positions, strengths and weaknesses to set up the plans to build reputation on media.

 

Besides, the diversity of the topics on media is another factor that the banks should consider. The diversity enables banks to introduce their organizational structure and its activities as well as disperse their attentions. Moreover, the organisations today are orienting themselves towards the sustainable development model, which is recognised by not only good financial activities of banks, but also responsibilities for the environment, community as well as the relationship built with partners and customers. Therefore the distribution and diversity of the information on media are what the banks should and must do to increase their prestige on media.