Vietcombank reports record pre-tax profit

Hanoi (VNA) – The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) reported a pre-tax profit of more than 11 trillion VND (482.5 million USD) in 2017.

This was a record pre-tax profit achieved by a Vietnamese bank, representing a rise of 32.9 percent during the same period in the previous year and 16 percent higher than Vietcombank’s target.

Reporting at the bank’s 2018 business conference on January 12, Vietcombank General Director Pham Quang Dung said the results in 2017 were impressive and far exceeded targets.

Total deposits last year amounted to 889.7 trillion VND, up by 38.7 percent year on year and 18 percent above set target.

Vietcombank’s outstanding loans reached 553 trillion VND, an increase of 17.2 percent.

Credit quality was under control, with the ratio of non-performing loans at 1.11 percent, a drop of 0.35 percentage points over the end of 2016.

The bank allocated more than 6.18 trillion VND for provisioning last year.

Its trading of foreign currencies was worth 45.1 billion USD, rising by 27.2 percent, while transfer of remittances was worth 1.9 billion USD, up by 14.9 percent.

Speaking at the conference, Vietcombank Chairman Nghiem Xuan Thanh said the bank’s project to restructure and resolve bad debts by 2020 was approved by the State Bank of Vietnam (SBV) earlier this week, targeted to develop Vietcombank into a leading bank in risk management in Vietnam, as well as to join the top 100 largest banks in Asia, and become one of the world’s top 300 financial corporations.

The central bank also allowed Vietcombank to offer shares to foreign investors in a private placement which, Thanh said, if successfully implemented in the first months of 2018 would be a positive sign.

Thanh added that last week Prime Minister Nguyen Xuan Phuc gave a green light to Vietcombank’s plan of opening a subsidiary in Laos.

On January 8, Vietcombank announced that it would complete the development of the probability of default (PD) model in accordance with Basel 2.

With the PD model, Vietcombank was getting ready to apply Basel 2, following an advanced internal ratings-based approach.

Vietcombank was the largest among listed banks by capitalisation, with its share traded at 58,800 VND each on January 12 morning and a market capitalisation of nearly 10 billion USD.

SBV Governor Le Minh Hung said at the conference that Vietnam’s foreign exchange reserve reached a record high of 54.5 billion USD as of January 12.

This would help consolidate business confidence and attract foreign investors, Hung said.

In the first ten days of 2018, the foreign exchange reserve rose by 1.5 billion USD.

Since early 2016, when a fixed exchange rate regime was applicable, the central bank bought a net value of 22 billion USD.-VNA