In 2019, SSI’s total assets continued to increase firmly, reaching VND 27 thousand billion as of 31 December 2019 - an increase of 13.5% over the same period.

 

In terms of structure, current assets accounted for 82% of total Company’s assets, in which safe assets such as cash, cash equivalents and bank deposits accounted for 3.9%, Held-to-maturity (HTM) investments including term deposits and certificates of deposit with remaining maturity of less than 1 year gained by 39.7%. 


Total bank deposits remained at VND 11,762 billion at the end of 2019, equivalent to a 9% reduction year-to-year. This asset is fully financed by loans from commercial banks. The average interest rate difference between borrowing interest rates and deposit interest rates is 1.5%. Treasury not only brings a part of revenue to the Company, but these impressive figures are also testimony to SSI’s creditworthiness, professionalism and dynamism in business relations with commercial banks. Furthermore, it also brings other benefits such as building a low-cost, fast and effective payment relationship in payment services for investors. Risk management for treasury activities is also very rigorous with partner banks for loans and deposits being prestigious banks with absolutely guaranteed liquidity. In 2019, the Company did not have any payment delay or disputes related to loan and deposit contracts. 


Given unpredictable fluctuations of the share market in 2018-2019 and served for demands of new services, SSI allocated its assets in a flexible manner. The Company gradually transferred a part of investment assets from shares to bonds and certificates of deposits. Particularly, in 2019, available-for-sale (AFS) financial assets declined by 40% while financial assets at fair value through profit and loss (FVTPL) increased over 2 times, mainly thanks to new investments in certificates of deposits. In addition, 3% of FVTPL list was the held securities with hedging against risks for covered warrants released by SSI during the year. 


SSI’s margin outstanding balance tended to decline slightly, at VND 5,286 billion at the end of 2019, while foreign securities companies were entering the market and initially gave very low lending interest rate to customers. However, the Company continued to focus on improving quality of services supplied to investors in combination with diversification of financial products and services and maintains careful lending policy in context of unpredictable market fluctuations, instead of non-sustainable competition with very low interest rate. SSI’s margin lending has been conducted with rigorous risk control thanks to the co-ordination of multiple control inspections of the Operations Control, Financial Services, Risk Management and periodic review of Internal Audit in collaboration with Internal Control. Risk management process for margin lending activities is an end-to-end process, from the development of a scoring system for stocks qualified for margin lending, to the determination of reasonable limits, monitoring of potential daily volatility, to compliance with risk management discipline when the warning thresholds are hit. Strict risk management supports customers to make flexible and safe investment transactions and preserve capital for the Company, in 2019 no bad debts were incurred in SSI. Margin lending activities were evaluated quite effectively despite a year of ups and downs, outstanding loans at times reached a record level of over VND 6,200 billion and sometimes decreased to VND 5,000 billion, but overall posing no risk. The average lending interest rate of over 12% of the total outstanding loans has contributed significantly to revenue, accounting for more than 20% of the total operating income of the Company.


Asset growth also corresponds to the growth of the Company’s capital. Owner's equity reached more than VND 9,401 billion in 2019, up from VND 9,156 billion at the end of 2018. The remaining source mainly includes bank loans with outstanding short-term loans from banks at the end of 2019 being VND 16,409.5 billion and SSI’s convertible bonds balance being VND 1,106 billion. Although the loans and bond issuance grew at a large scale, SSI always ensured liquidity at the highest level, in 2019 as well as throughout the business process, the Company never had a liquidity risk event nor generated any bad debts. Capital raising is mainly done in VND, except a small portion of loan made in foreign currency from foreign banks but properly hedged by foreign currency swap contract. As mentioned above, the Company’s loans are mainly to finance the asset growing transactions, namely bank deposits which are free of potential credit risks. Deposit terms are very flexible and are always signed with an overdraft loan limit, along with accurate projections of interest rate fluctuations, so the company are not faced with interest rates risks. 

 

 

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