Commercial banks cut profit target amid COVID-19 pandemic hinh anh 1A branch of SHB Bank. Many banks are cutting their annual profit targets due to the impacts of COVID-19 (Photo: VNA)

Hanoi (VNS/VNA) - Many banks in Vietnam have reduced their profit target for 2020, and plan to support companies severely impacted by the COVID-19 pandemic.

Besides, the State Bank of Vietnam (SBV) issued instructions on 31 March to banks to cut costs and bonus payments and not pay dividends in cash. 

Nam A Bank has reviewed its 2019 performance and 2020 plans, and said it now targets pre-tax profit of only 800 billion VND (34 million USD) in 2020, 13.5 percent down from last year.

But it plans to keep some other targets unchanged. The bank said it would seek to achieve the credit target it set based on the State Bank of Vietnam’s credit growth quota.

It is set to lower lending interest rates by 2 percentage points, with businesses in agriculture, hospitality and import-export benefiting the most from this.

It has also unveiled a 1 trillion VND (42.5 million USD) loan package for individual customers at an interest rate of 9.9 percent.

Hoang Viet Cuong, deputy general director of the lender, said it is meant to enable borrowers to revive production and get their lives back to normalcy.

Bad debts this year would not exceed 3 percent, the bank said.

Sai Gon – Hanoi Commercial Joint Stock Bank (SHB) also plans to cut its 2020 profit target, adding that it would be by at least 1 trillion VND.

It also plans to reduce operation costs. Its executives have volunteered a 50 percent wage cut until the pandemic ends, while department heads are amenable to 10-30 percent cuts.

The bank has earmarked 25 trillion VND for loans with many preferential offers including a 2 percentage point interest rate cut. It also plans to restructure customers’ loans. 

It is expected that more banks will announce changes to strategies and interest rate cuts to support clients in the coming days.

A report from the National Statistics Office said the credit growth this year has been only 0.68 percent, 1.22 percentage points down year-on-year.

Deposit growth has fallen to 0.51 percent from 1.72 percent, it added./.