SBV vows to restructure financial leasing companies Despite the high demand and the fertile market, only 50 percent of Vietnamese owned finance leasing companies have been profitable.    Most of them are facing big challenges while their financial capability is limited and Vietnam is due to fully integrate into the world. According to the Vietnam Finance Leasing Association (VILEA), only four out of eight companies do not have accumulated losses, namely VietinBank Leasing, Vietcombank Leasing, Sacombank Leasing and ACB Leasing. Meanwhile, BIDV Leasing and Agribank Leasing I made profit in 2014, but both of them have relatively high accumulated losses. The companies to be forced to undergo restructuring include Vinashin Leasing, Agribank Leasing I and Agribank Leasing II. Meanwhile, BIDV Leasing will be operating while settling debts. An analyst noted that there was a time in the past when finance leasing companies and commercial banks focused on leasing ships and transport vehicles. Later, as the world’s transportation market went downhill, lenders all suffered the same fate. According to the State Bank, finance leasing companies’ total outstanding loans and assets are sharply decreasing. Some companies have minus stockholder equity. The capital adequacy ratio (CAR) of the whole system is low at 3.35 percent, while the minimum required ratio is 13 percent for credit institutions. Therefore, the analyst commented, shutting down weak companies or undergoing restructuring is a must. The State Bank of Vietnam is drafting two circulars which would have a big impact on credit institutions’ operation, which say that commercial banks will have to set up subsidiaries and finance leasing companies, to provide consumer credit. Techcombank now has FE Credit, while HDBank has HDFinance which has sold 49 percent of its stake to Credit Saison. Meanwhile, other banks are moving ahead with their plans to set up new businesses or acquire existing companies. BIDV, for example, has submitted the plan to set up a finance leasing company by buying an operational company, setting up a new business or shifting its existing company. Meanwhile, VietinBank is considering shifting a part of PG Bank which has just merged with it, into a finance leasing company which may be named PG Finance. ACB is reportedly going to establish ACB Leasing which provides consumer credit, finance leasing and factoring services with expected chartered capital of VND500 billion. Sacombank, Nam A Bank, OCB and Dong A Bank are also considering establishing finance leasing companies with VND500 billion in chartered capital. The finance leasing service market in Vietnam is large with small and medium enterprises their major clients, accounting for 95 percent of total enterprises. TBNH