Vietcombank posts record high pre-tax profit for 2016

Hanoi (VNA) - The Bank for Foreign Trade of Vietnam (Vietcombank)’s pre-tax profit hit a record high of 8.2 trillion VND (361.76 million USD) in 2016, up 23.4 per cent against 2015.

Nghiem Xuan Thanh, the bank’s chairman, shared the information last week at a meeting held to review the bank’s performance in 2016.

Vietnam’s largest bank by market capitalisation is also targeting a pre-profit figure of 9.2 trillion VND in 2017, 12 percent higher than last year.

Vietcombank also expects its total assets to rise by 11 percent in 2017, while it has forecast that its credit growth and capital mobilisation will be 18 percent and 15 percent, respectively. The bank aims to keep its non-performing loans (NPLs) under 1.5 percent.

At the meeting, Le Minh Hung, Governor of the State Bank of Vietnam (SBV) told Vietcombank to focus on settling NPLs through mortgaged assets.

Hung said Vietcombank made significant achievements last year in settling bad debts, which has brought its bad debt ratio down to 1.45 percent, but these settlements were mainly through provisions, which reduced the bank’s profits. Last year, Vietcombank spent around 8.2 trillion VND for provisions, equal to 121 percent of its total NPLs.

The Governor also instructed the bank to prioritise the completion of its restructuring project and determine its position in the region in the next five to 10 years.

The central bank will also have to take part in the restructuring of other ailing banks, but the Government would issue detailed policies to avoid being affected because of it, Hung said.

Vietcombank must also implement administrative procedures more effectively so that it is easier in 2017 for businesses to take its loans, the Governor said.-VNA