Modest lending by smaller commercial banks in the first half of the yearhas put them under pressure to meet their annual profit targets.
While many major commercial banks have posted profits equivalent to 50percent of their annual target, lending activities of many small bankshave lagged behind, the Dau Tu (Investment) weekly reports.
The Lien Viet Joint Stock Commercial Bank (LienVietBank) has justannounced pre-tax profits of 350 billion VND (18.42 million USD) by July10, just 30 percent of the annual target.
Theoutlook is not much better at the Orient Joint-Stock Commercial Bank(OCB) which generated pre-tax profits of 174 billion VND, much lowerthat the yearly target of 400 billion VND.
The GreatTrust Joint Stock Commercial Bank (TrustBank) set a target of earning290 billion VND in pre-tax profits, including 190 billion VND fromcredit activities. However, its first half pre-tax profit of 70 billionVND makes the annual target a very tough one.
Commercial banks are also facing other obstacles to meeting their annualtargets, the paper quotes market analysts as saying.
To accelerate their credit activities, the banks have to drop theirlending rates but they cannot do it without reducing deposit rates tothe needed level.
Mobilising capital has also becomemore difficult at this time. After deposit interest rates were adjustedin the first two weeks of July, the money from people's savingsdeposited with the banks decreased significantly.
Inrecent years, many commercial banks have managed to increase theirsources of revenue through several services in order to reduce theirdependence on credit activities.
However, most commercial banks have not recorded any significant success with this strategy.
Experts also said that in the coming time, banks would be more carefulwith their credit development so as to ensure the efficiency of capitaluse. They are required to increase their capital adequacy ratio fromthe current 8 percent to 9 percent from October 1 onwards.
At its current pace in credit growth, the banking sector will find itdifficult to realise the growth target of 25 percent set for the year,according to Le Duc Thuy, chairman of the National Finance SupervisionCommittee./.
While many major commercial banks have posted profits equivalent to 50percent of their annual target, lending activities of many small bankshave lagged behind, the Dau Tu (Investment) weekly reports.
The Lien Viet Joint Stock Commercial Bank (LienVietBank) has justannounced pre-tax profits of 350 billion VND (18.42 million USD) by July10, just 30 percent of the annual target.
Theoutlook is not much better at the Orient Joint-Stock Commercial Bank(OCB) which generated pre-tax profits of 174 billion VND, much lowerthat the yearly target of 400 billion VND.
The GreatTrust Joint Stock Commercial Bank (TrustBank) set a target of earning290 billion VND in pre-tax profits, including 190 billion VND fromcredit activities. However, its first half pre-tax profit of 70 billionVND makes the annual target a very tough one.
Commercial banks are also facing other obstacles to meeting their annualtargets, the paper quotes market analysts as saying.
To accelerate their credit activities, the banks have to drop theirlending rates but they cannot do it without reducing deposit rates tothe needed level.
Mobilising capital has also becomemore difficult at this time. After deposit interest rates were adjustedin the first two weeks of July, the money from people's savingsdeposited with the banks decreased significantly.
Inrecent years, many commercial banks have managed to increase theirsources of revenue through several services in order to reduce theirdependence on credit activities.
However, most commercial banks have not recorded any significant success with this strategy.
Experts also said that in the coming time, banks would be more carefulwith their credit development so as to ensure the efficiency of capitaluse. They are required to increase their capital adequacy ratio fromthe current 8 percent to 9 percent from October 1 onwards.
At its current pace in credit growth, the banking sector will find itdifficult to realise the growth target of 25 percent set for the year,according to Le Duc Thuy, chairman of the National Finance SupervisionCommittee./.
