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Banks reserve with 2009 business targets
Unlike previous years, when commercial banks always set ambitious business targets, targets banks plan to submit to boards this year prove to be quite a bit more modest.
Banks have every reason not to set overly ambitious business plans for 2009, when the market is expected to see continued difficulties. Enterprises’ narrowed markets will make banks find it difficult to push up credit. Meanwhile, bond trading will not be the ‘goose that lays the golden egg’ anymore, while gold and foreign currency trading will not be as profitable as they were in the first two quarters of 2008.
Though banks still have set business targets in 2009 higher than the implemented figures in 2008, all of them show signs of ‘playing defence’.
According to Sacombank, its business plan for 2009 has been built up based on difficulties which are expected to be more serious in 2009 as a result of the global financial crisis. The bank is going to submit to the upcoming shareholders’ meeting a plan to get VND1,700bil in pretax profit.
In 2008, the bank got VND1,200bil in pretax profit, or VND300bll lower than the targeted figure. Prior to that, the targeted figures were once lowered from VND2tril to VND1,500bil.
Asia Commercial Bank (ACB) plans to submit a ‘modest’ business plan with the targeted profit just higher by VND144bil over the profit it got in 2008, at VND2,556bil.
An official from the bank said that the bank has set a cautious business plan after analysing the market situation. In 2009, banks’ credit growth rate is not limited at 30% like in 2008, but the official said that it will not be easy for banks to push up lending.
In 2008, profit from traditional lending products just brought a very small proportion of profit of the bank. ACB’s profit mainly came from bond investment, which brought some VND1,200bil.
General Director of Techcombank Nguyen Duc Vinh said that in 2008, the bank got the pretax profit of VND1,600bil, fulfilling the business plan set earlier in 2008. However, Vinh also said that the profit mainly came from investment activities and services, including bond trading. Vinh said that the income from international payment services brought the turnover of $1bil.
Vinh said that in 2009, difficulties will still exist. Demand stimulus packages are a good solution, but more and more measures need to be undertaken to restore the confidence of people. Though Techcombank believes that the measures will help stimulate demand, the bank dares only maintain the profit target of VND1,600bil in 2009, the same as in 2008.
East Asia Bank has set a profit target for 2009 which is just VND50bil higher than the implemented figure in 2008, at VND700bil. The bank thinks that the finance sector will meet fewer difficulties than other business fields in the year, but it does not think that credit growth can be improved over night.
VietNamNet, DTCK
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