HCM City Housing Development Commercial JS Bank: Providing Housing Care for People

In our early day (in the early 1990s), we faced many difficulties as we had to seek capital from local people and provide short-term loans for quick capital circulation. In 1998, when we were strong enough, we started our housing development functions. In the period that followed, we provided medium and long-term loans for people to buy, repair and build houses. Our charter capital had increased from VND 3 billion to VND 150 billion by December 31, 2004. This figure doubled that of 2003. Since the increase of charter capital, the structure of our charter capital has changed with contributions made by State-owned enterprises, including such major shareholders as the Saigon Housing Corporation, the Fund for Urban Investment and Development, the Saigon Trade Corporation and the Bank for Investment and Development of Vietnam, accounting for 54.8 per cent of our charter capital.

Our business scope is to provide banking services with loans playing the dominant role. We have a variety of customers as we provide loans for production and business activities, trade and services, projects of enterprises and individuals who have registered to do business in industrial parks and export processing zones, projects on building residential areas, including loans for compensation and site clearance, and infrastructure development. We have provided loans for enterprises to construct buildings for lease, high-end residential apartments and residential areas for low income earners. We have also provided consumer credits and in particular we have provided ten year loans for people to buy, build and repair houses.

We now have a head office and six branches. We will open one more branch in District 9, Ho Chi Minh City in the final quarter of 2005.

So far, we have made significant contributions to housing development to meet the local people’s demand by providing ten-year loans. We have provided financial support for developers and those who want to buy houses. These include the Binh Chanh Construction Company, developer of the Binh Hung residential area in Binh Chanh district; the Urban Investment and Development Company, developer of the Mieu Noi residential area in Binh Thanh district, the Him Lam Company, owner of the Dong Dieu residential area in District 8; the Khanh Gia, developer of the Khang Phu residential area in Tan Phu district; the Nam Long Company, developer of the residential areas for low income earners in Tan Thuan Dong ward, District 7; the M&C Joint stock Company, developer of the My Thuan residential area in Ward 16, District 8; and the Dat Phuong Nam Trade and Construction Company, developer of the Chu Van An 1 residential area, and trade and residential area of Dat Phuong Nam in Binh Thanh district. We are targeting those who have stable incomes and want to buy houses on a hire purchase basis, or young people who are university graduates and do not have enough money to buy houses.      

Our financial status is healthy with a low rate of bad debts as we have strictly observed the State’s regulations on risk management. We ended our 2004 financial year with good business results, continuing our target of ‘a stable and sustainable development.’ Having implemented an approach of promoting credit and developing existing services and boosting the regaining of bad debts, which had been settled with risk prevention funds, by December 31, 2004, total income of HDB had increased by 26 per cent against 2003. Our pre-tax profits increased by 23 per cent over 2003. Also, HDB implemented commitments of profit distribution of 12 per cent per year, accounting for 48 per cent of net profits. 2004 was the first year we have accumulated dividends, accounting for 22 per cent of our net profits.  

In 2005, we will increase our charter capital from VND 150 billion to VND 300 billion, modernising our services and making preparation for Vietnam’s forthcoming international integration. We are co-operating with Vietnamese and foreign software enterprises to build banking management software, gradually issue ATM cards, compatible with magnetic and chip-based card machines. We will perfect our existing services and products for better serving customers. We will also concentrate on opening more branches in Ho Chi Minh City and other localities to provide better support for housing development and mobilise unused capital.

At the same time, we will concentrate on improving skills of our staff members, creating favourable conditions for staff members to join training courses. Vietnam is at the threshold of international integration, HDB, like any Vietnamese enterprise, has to get prepared to provide high quality products and services to meet the increasingly high demand of customers.