Credit institutions gained an accumulated profit of 29.5 trillion VND(1.34 billion USD) during the first 11 months of this year, up 3.2percent from the same period last year.
Accordingto the State Bank of Vietnam (SBV)'s chief inspector Nguyen Huu Nghia,the profit is equal to only 53-64 percent compared to profits in 2010and 2011.
Nghia attributed the result to the sharplydropping interest rate and increasing costs of basic goods.Additionally, as much as 17 percent of credit institutions incurredlosses during the period, he said, adding that among the profitableinstitutions, more than half had falling profit levels compared to lastyear.
Nghia said he was concerned that if thebusiness performance did not improve, part of the credit institutionswould be placed under enormous financial pressures and might not be ableto handle large amounts of bad debts, forcing them to sell their debtsto the Vietnam Asset Management Company.
Creditinstitutions, especially small-sized ones, also said that it wasdifficult to meet their profit targets this year, attributing it to lowcredit growth due to economic difficulties.
Meanwhile, Mekong Bank general director Tay Hang Chong toldtinnhanhchungkhoan.vn that his bank's business performance in 2013 wasrelatively good, however, it was difficult for the bank to meet its 300billion VND (14.28 million USD) annual pre-tax profit target.
According to Chong, it was difficult, not only for Mekong Bank butalso for other banks, to meet the profit targets this year.
Echoing Chong, Ocean Bank deputy general director Nguyen Van Hoan saidthat profits from the banking industry this year could not be as highas expected, since the industry was still facing many difficulties.
Hoan said that besides economic hardships, profits from the creditactivity of the banking industry were lower than previous years becauselending rates have been significantly cut. Currently, to boost lending,gaps between deposits and lending interest rates in many banks wereroughly 1.5 percent yearly for enterprises and 2-2.5 percent forindividuals.
Further, NamA Bank deputy generaldirector Tran Ngoc Tam said that credit institutions were also cautiousto boost lending, as they were concerned about rising bad debts. Tamsaid the bank had to set aside more than 66 billion VND (3.14 millionUSD) for provisions, though its bad debt was still maintained at lessthan 3 percent.
This year, however, many banks said they have gained profits thanks to the stable forex rate policy.
Sai Gon Thuong Tin Commercial Joint Stock Bank's general director PhanHuy Khang said foreign exchange was one of the "bright" segments thatare supporting banks' profits in the context of a strong fall of incomefrom credit activities.
As per the financial reportsfrom 13 commercial joint stock banks, in the third quarter of 2013,their income from foreign currency and gold trading activities reachedmore than 670 billion VND (30.45 million USD), a significant rise incomparison with the loss of 704 billion VND (32 million USD) in the sameperiod last year.-VNA
Accordingto the State Bank of Vietnam (SBV)'s chief inspector Nguyen Huu Nghia,the profit is equal to only 53-64 percent compared to profits in 2010and 2011.
Nghia attributed the result to the sharplydropping interest rate and increasing costs of basic goods.Additionally, as much as 17 percent of credit institutions incurredlosses during the period, he said, adding that among the profitableinstitutions, more than half had falling profit levels compared to lastyear.
Nghia said he was concerned that if thebusiness performance did not improve, part of the credit institutionswould be placed under enormous financial pressures and might not be ableto handle large amounts of bad debts, forcing them to sell their debtsto the Vietnam Asset Management Company.
Creditinstitutions, especially small-sized ones, also said that it wasdifficult to meet their profit targets this year, attributing it to lowcredit growth due to economic difficulties.
Meanwhile, Mekong Bank general director Tay Hang Chong toldtinnhanhchungkhoan.vn that his bank's business performance in 2013 wasrelatively good, however, it was difficult for the bank to meet its 300billion VND (14.28 million USD) annual pre-tax profit target.
According to Chong, it was difficult, not only for Mekong Bank butalso for other banks, to meet the profit targets this year.
Echoing Chong, Ocean Bank deputy general director Nguyen Van Hoan saidthat profits from the banking industry this year could not be as highas expected, since the industry was still facing many difficulties.
Hoan said that besides economic hardships, profits from the creditactivity of the banking industry were lower than previous years becauselending rates have been significantly cut. Currently, to boost lending,gaps between deposits and lending interest rates in many banks wereroughly 1.5 percent yearly for enterprises and 2-2.5 percent forindividuals.
Further, NamA Bank deputy generaldirector Tran Ngoc Tam said that credit institutions were also cautiousto boost lending, as they were concerned about rising bad debts. Tamsaid the bank had to set aside more than 66 billion VND (3.14 millionUSD) for provisions, though its bad debt was still maintained at lessthan 3 percent.
This year, however, many banks said they have gained profits thanks to the stable forex rate policy.
Sai Gon Thuong Tin Commercial Joint Stock Bank's general director PhanHuy Khang said foreign exchange was one of the "bright" segments thatare supporting banks' profits in the context of a strong fall of incomefrom credit activities.
As per the financial reportsfrom 13 commercial joint stock banks, in the third quarter of 2013,their income from foreign currency and gold trading activities reachedmore than 670 billion VND (30.45 million USD), a significant rise incomparison with the loss of 704 billion VND (32 million USD) in the sameperiod last year.-VNA
