Banks set sights high

Commercial banks have announced their targets for this year, though in many cases they have yet to receive shareholder approval. They are mostly higher than last year's figures despite the fact that economists fear 2011 will remain a hard year.

Long An Province-based TRUSTBank expects that its profits almost double from last year's VND600 billion (US$28.6 million). It also plans to enlarge charter capital by 40 per cent to VND5 trillion ($238.3 million) and its network by almost a third to 130 branches and transaction offices.

Ha Noi-based Military Bank's Deputy General Director Cao Thi Thuy Nga, while refusing to divulge details, said her bank targeted a general growth rate of 30 to 40 per cent.

Its pre-tax profit last year reached VND2.1 trillion ($100.1 million).

She said with the impacts of the global economic crisis expected to continue for several more years, Viet Nam's economic instability and stricter capital adequacy norms, banks would find it hard to achieve their ambitious targets.

But she also said: "We know there will be difficulties but there are always opportunities for those who know how to grasp them."

Viet Nam Export Import Commercial Bank's (Eximbank) General Director Truong Van Phuoc said the bank hoped to increase pre-tax profits by 26 per cent to VND3 trillion ($143 million) this year though the exact number would be decided at the coming shareholders' meeting.

Last year was tough for the banking industry due to several factors like high interest rates and volatility in forex rates, but most banks managed to achieve profit growth of around 30 per cent.

Huynh The Du, a Lecturer for the Fullbright Economic Programme in Viet Nam, said several factors benefited banks – like the large gap between official and unofficial foreign exchange rates which the banks exploited to extract a fee from customers buying the greenback.

Another was the cap imposed on deposit rat.her than lending interest rates which meant businesses had to accept whatever the banks offered them.

Thuy Anh

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