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Banks cautious in building 2009 business plan
The low profit in 2008, which was equal to only 1/3 of that in 2007 for many banks, has reminded banks that they should not be too ambitious in building their business plans for 2009.
Many banks earned hundreds of billions VND in profit when they sold bonds at the end of December 2008. However, not many banks could reap major profit. The profit obtained by many banks in 2008 was just as big as 1/3 of the profit in 2007.
Sacombank, one of the biggest joint-stock banks in Vietnam, has reported a profit of VND 1,200 billion in 2008. Prior to that, anticipating the difficulties in operation in 2008, the bank’s leadership sought permission from shareholders to lower the targeted profit from VND 2 trillion to VND 1,500 billion.
The bank plans to reap VND 1,700 billion in pre-tax profit in 2009, or VND 500 billion higher than the profit gained in 2008, while it also plans to raise the chartered capital to VND 7 trillion.
Vietcombank’s General Director Nguyen Phuoc Thanh said that the equitised bank had to make every effort to fulfill the plan of gaining VND 3,400 billion in profit in 2008.
The profit target of Vietcombank for 2009, according to Thanh, will not be higher than that of 2008, as the financial market in 2009 is forecasted to experience more difficulties.
To date, Asia Commercial Bank (ACB) has not declared its business results. Though the 2008 fiscal year has ended, the bank’s leaders said that the bank had not adjusted the targeted profit plan of VND 2,500 billion set at the beginning of the year.
ACB is believed to have gained high profit in 2008, thanks to its diversified services, especially from the gold trading floor. However, ACB said that the targeted profit for 2009 will be ‘modest.’
Having fulfilled the plan on the pre-tax profit of VND 700 billion, an encouraging result in the current difficulties of the national economy, Tran Phuong BInh, General Director of East Asia Bank, said that the bank only dares hope to obtain a profit higher by VND 50 billion in 2009.
Binh believes that commercial banks will be able to take initiative in their business plans instead of staying passive as they did in 2008, when the monetary policies changed unexpectedly all the time.
However, he said that major difficulties will still exist, especially when banks still cannot find a way to boost credit disbursement.
The pre-tax profit gained by SCB in 2008 was VND 658 billion, an increase of 83% over 2007, but this just a little higher than the targeted profit that was lower than the initial level.
However, not every bank is ready to declare their profit results. The Director of the HCM City branch of a small joint-stock bank said that the profit of the bank in 2008 was just equal to 50% of the targeted level.
Some small banks complain that they incurred losses in the last two quarters of 2008, when they had to lower the lending interest rates once the basic interest rate announced by the central bank were slashed.
DTCK
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