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Banks’ 5-month profit satisfactory
Many banks have reported satisfactory business results for the first five months of the year. This proves to be quite different from the first five months of 2008, when bad business results forced banks to lower business targets.
Good business results
DongA Bank reportedly earned the profit of 329 billion dong through May 2009, fulfilling 43.9 percent of its 2009 target (750 billion dong). Sacombank has reported the pretax profit of 660 billion dong after provisioning for finance investments and credit risks (the profit figure does not include profit from member companies of Sacombank group).
Smaller banks like TienPhong Bank and HDBank also reported satisfactory pretax profit of 133 billion dong and 75 billion dong, respectively.
Though the gap between deposit and lending interest rates is narrow and they can’t earn a lot of money from loans, banks say that the income from credit still accounted for 50 percent of their total profit in the first five months of the year.
Currently, banks have opportunities to expand consumer credit as no ceiling lending interest rate is set for consumer loaning. Meanwhile, the demand for loans to fund house and land purchases has increased. Bankers say that if the market in the next six months of the year does not see wild changes, banks may be able to fulfill yearly business targets. When the national economy recovers, the demand for capital will increase from businesses.
Banks have every reason to cherish hopes
ACB’s pretax profit by May 15 had reportedly reached 692 billion. The bank hopes to obtain the profit of 1,100 billion in the first six months of the year, and 2,700 billion dong in pretax profit in 2009.
According to DongA Bank, the bank’s outstanding loans by the end of May had reached 26,999 billion dong, an increase of 23.2 percent over the same period of 2008. DongA’s Deputy General Director Phung Duy Khuong said that since the bank launched new credit products, the bank’s outstanding loans have increased sharply because of the increasing capital demand from students.
Commercial banks have been adjusting input interest rates with the deposit interest rates nearly hitting 10 percent per annum in order to attract more idle capital from the public.
VietNamNet, LD
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