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VN bankers confident on profit targets
Several domestic banks have posted positive earnings for the first half of the year and are confident of hitting their profit targets for the year.
HCM City Stock Exchange-listed Sacombank, with total assets of VND140 trillion (US$6.7 billion) as of June 30, posted a profit of over VND1.5 trillion ($72.78 million) for the period, representing 56 per cent of the year's target. About 83 per cent of profits were attributed to interest income on loans.
Sacombank General Director Tran Xuan Huy vowed that Sacombank would be able to achieve and even exceed its profit target of VND2.7 trillion ($131 million) by the end of the year.
However, Vietcombank Chairman Nguyen Hoa Binh said, "It's rather soon and risky to say anything about business results for the whole year." Vietcombank posted a VND3 trillion ($145.56 million) profit in the first six months out of the year, against a target of VND5.65 trillion ($274.19 million) for the year.
DongA Bank posted a profit of VND675 billion ($32.75 million) during the period, putting it on course to meet its target for the year and to pay a planned dividend of 15 per cent. General director Tran Phuong Binh also said that the credit growth of many banks remained well below the credit growth cap for the year, giving them room to expand business in the coming months.
However, An Binh Bank fell behind the pace it needed to maintain to meet its target, announcing a profit of VND307.6 billion ($14.92 million) in the first six months, an amount only a little over 46 per cent of the year's target. General director Tran Thanh Hoa cautioned that banks needed to improve early forecasting and risk management to counter potential challenges in the tough months ahead.
During a difficult time for the economy, the return-on-equity (ROE) in the banking industry was much higher than in other sectors, said economist Le Tham Duong. "The story of what banks do to share risks with enterprises should be discussed more seriously," Duong said. "Regulators must ensure economic policies benefit all entities in the economy, rather than grant privileges to the banking sector." "Banks get many benefits from economic policy." said another HCM City-based economist who asked to remain anonymous. "The deposit interest rate cap, for example, is creating favourable conditions for banks to buy low and sell high."
Deposit interest rates are currently capped at 14 per cent while lending interest rate are freely floating at around 19-20 per cent.
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