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Banks reap hefty profits

The Saigon Times Daily
Wednesday,  Jan 11,2017,22:38 (GMT+7)
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Banks reap hefty profits

The Saigon Times Daily

Customers withdraw cash from ATM machines of Vietcombank in HCMC. Vietcombank, BIDV and VietinBank have reported trillions of Vietnam dong in 2016 profits - PHOTO: THANH HOA

HCMC - Vietcombank, BIDV and VietinBank have reported trillions of Vietnam dong in 2016 profits, according to Dan Tri news website.

VietinBank earned profit of VND8.25 trillion, up 12% from 2015 and 4% higher than the target approved by shareholders, said the bank’s general director Le Duc Tho.

Vietcombank said it achieved pre-tax, pre-provision profit of VND14.6 trillion, up 15.0% year-on-year. Their profit before tax stood at VND8.21 trillion, a rise of 23.4% from the preceding year and 2.7% above the target for 2016.

At BIDV, pretax profit is estimated at VND7.5 trillion, up 7% from 2015. Its total assets by the end of 2016 had amounted to VND1,007,000 billion, making BIDV the first bank to have total assets touching the VND1,000,000 billion mark.

As for joint-stock banks, just three of them have reported profits in 2016, which are also encouraging.

Pre-tax profit of Tien Phong Bank was larger than expected, VND707 billion, an increase of 12.93% against 2015. Therefore, its return on equity (ROE ) reached 12%, a relatively high rate compared to the current average in the banking system.

VIB’s pre-tax profit is put at VND702 billion, 4% higher than the full-year plan approved at a shareholder meeting and 7% higher than in 2015.

NCB’s total assets amounted to nearly VND65.25 trillion, 2.5 times greater than in the period before its restructuring. Meanwhile, its net profit totaled VND230 billion, five times higher than before it was restructured.

Although other banks have not made public their 2016 earnings, the results of the above lenders suggest the banking sector generated a large profit margin last year. If banks had not made big risk provisions, their profits could have been higher.

Banks last year focused on settling bad debts. For example, the biggest success of VietinBank in 2016 was to handle nearly VND10 trillion in bad debt incurred in the period from 2007 to 2010, said chairman Nguyen Van Thang.

Profits of banks are mainly sourced from their lending operations.

Vietcombank, which centered on injecting cheap capital into the economy, posted high credit growth last year, 18.9%. Notably, credit for small and medium-sized enterprises and individual clients expanded 39% and 38.8% respectively.

As the biggest profit generator in the banking system, VietinBank is reducing its dependence on lending for profit while promoting services as a new stream of revenue and income, said general director Tho. For the first time, the percentage of services revenues rose to 20% last year.

In 2016, total outstanding loans of VietinBank amounted to VND720 trillion, a surge of 18% from 2015, accomplishing the plan for the year.

At Tien Phong Bank, the portfolio of its profitable assets improved considerably. Specifically, credit continued growing.

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Giấy phép Báo điện tử số: 321/GP-BTTT, cấp ngày 26/10/2007
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