Many banks have planned higher profits this year as they expect better recovery in the economy.
This year, the total expected pre-tax profits of 26 banks, which haveannounced their business plans this year, were estimated at 36.7trillion VND (1.748 billion USD), rising 5.18 percent over last year.
The Vietnam Joint Stock Bank for Industry and Trade (VietinBank)led in terms of pre-tax profit plan in 2014 with 7.28 trillion VND(346.66 million USD), followed by Bank for Investment and Development ofVietnam (BIDV) with 6 trillion VND (285.7 million USD).
At theshareholders meeting held last week, Viecombank chairman Nguyen HoaBinh noted that his bank expected to gain a pre-tax profit of 5.5trillion VND (261.9 million USD), besides setting aside 5 trillion VND(238 million USD) for risk provision.
Vietcombank also targetedits total assets to rise by 11 percent against last year to 520.6trillion VND (24.79 billion USD). The bank's lending and capitalmobilisation are estimated to increase by 13 percent to reach 309.97trillion VND (14.76 billion USD) and 384.49 trillion VND (18.3 billionUSD), respectively.
Military Bank (MBB) and Sai Gon Thuong TinBank (Sacombank) also aimed to gain pre-tax profit of 3.1 trillion VND(147.619 million USD) and VND3 trillion ($142.8 million), respectivelyin 2014.
Another notable name this year is the VietnamProsperity Commercial JS Bank (VPBank) with a profit target of 1.89trillion VND against last year's 1.35 trillion VND (64.5 million USD),surpassing many other listed banks, including SHB and ACB. VPBank'stotal assets are also targeted to reach 155 trillion VND (7.38 billionUSD) against 121.26 trillion VND (5.8 billion USD) of last year.
According to Vietcombank's Binh, although the domestic economy isforecast to improve, many difficulties and challenges still lay ahead.Therefore, his bank will still adopt a cautious approach with regard toits performance plans this year. He further pointed out that it hasplanned to set aside 5 trillion VND (238.1 million USD) for riskprovision against 3.5 trillion VND (166.66 million USD) of last year.However, he remarked that Vietcombank's move towards the market will bealso flexible.
Meanwhile, VPBank General Director Nguyen DucVinh explained that the banking system this year will undergo continuousrestructuring. Therefore, he stated that profits and size cannot be thetop priority, but greater emphasis should be laid on risk managementand business model streamlining to prepare for a leap in thepost-restructuring period.
By the end of the first quarter ofthis year, several indications have hinted at dismal improvements in theprofits made by the banks. The unsatisfactory improvement has beenattributed to the difficulties faced by the banks' biggest income sourcefrom credit activities amidst low credit growth.
Furthermore,due to the impact of the macroeconomic context, especially the realestate, this year, bad debts will continue to affect the profits of thebanking sector, industry insiders have forecast.-VNA