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Banks say services account for first-half profits
Good earning results in the first six months of the year came from banking services, not from lending, Ho Chi Minh City-based banks said.
Some lenders in HCMC have just released their first-half earning report this year.
Saigon Thuong Tin Commercial Joint Stock Bank, known as Sacombank, announced pre-tax profit rose 23 percent to VND754 billion (US$45 million) in the first six months of the year from the same period last year.
State-owned lender, Bank for Investment and Development of Vietnam, or BIDV, posted a 44 percent increase in pre-tax profit of VND604 billion ($36 million) in the first half from the same period last year.
Vietnam Import Export Bank, or Eximbank, reported pre-profit of VND723 billion ($43 million), Dong A Bank more than VND404 billion ($24 million) and Vietnam International Bank VND323 billion ($19.2 million).
Banks have had to cope with many difficulties this year, including a 30 percent limit on credit growth and increasing interest rates.
Commercial banks cannot raise their lending rate above 21 percent per year, or impose extra fees or ask for loan security to increase the rate.
Therefore, the difference between deposit and lending interest rates is only around 2-3 percent per year, which only just covers operating expenditures.
So the question is where did their profits come from?
Most banks said their profit in the first six months of the year came from banking services, such as ATM transactions and foreign currency trading.
“Lending at the rate of 21 percent per year won’t be profitable,” Asia Commercial Bank (ACB) General Director Ly Xuan Hai said.
“Therefore, we’d rather focus on providing banking services than lending.
ACB still earned good profit despite our outstanding loan accounting for 40 percent of total assets, which now approaches VND100 trillion ($6 billion).”
Hai also said banks would not post such good results for the second half because high lending rates increased the risk of more bad loans.
“I think deposit interest rate should be around 17-18 percent per year as inflation shows signs of slowing down,” he said.
Thanhnien
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