Pawnshop chain F88 reports H1 loss following investigation

By Tat Dat   September 2, 2023 | 05:10 pm PT
Pawnshop chain F88 reports H1 loss following investigation
An office of F88 Investment JSC. Photo courtesy of F88
F88 Business JSC recorded a loss of VND368 billion (US$15.3 million) in the first half after police launched investigations into wrongdoings at the company.

Representatives of the pawnshop and loan firm cited the high cost of risk as the main reason for the loss.

The cost of risk means the cost of incurring losses because of risk and managing risks. The total of this cost is the sum of every aspect of a company's functions relating to risk.

According to F88, a recent inspection into debt collection conducted at businesses in the financial sector, including the company itself, had affected customers' tendencies towards debt payment. This forced businesses to tighten their risk appetite, which means the amount of risk an organization is willing to take in pursuit of objectives it deems valuable.

At the same time, results of the investigations limited F88’s ability to open new offices.

In the past time, police have probed a number of F88 branches across the country, including those in HCMC, Binh Duong and Can Tho, after detecting several violations. The violations included mismanagement of data and insufficient business activity reports.

In HCMC alone, investigations have been launched into 10 individuals who are either managers or staff at the company.

Founded in 2013, F88 has claimed to be the fastest-growing financial service provider in Vietnam. It has 830 branches throughout the country. After the latest investigation, the firm said it has developed processes, regulations, and sanctions in debt collection activities, ensuring it would comply with the law and not cover for individuals who break the rules.

F88 reported continuous profits in the 2019-2021 period, with the average annual figure hovering in the tens or hundreds of billions of dong (VND10 billion equals US$415,000).

Last year, after tax profits peaked at more than VND200 billion.

Its business results in the first half this year are quite similar to those of other financial institutions.

During the period, many financial companies reported decreased profits or even heavy losses ranging from hundreds of billions to thousands of billions of dong as their customers face financial difficulties and could not pay their debts.

The company plans to issue more private bonds in the last six months.

In March, F88 received investment funds of $50 million from two investors - Vietnam-Oman Fund and Mekong Enterprise Fund IV.

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