Although profit targets await approval from shareholders at general meetings in the coming months, most lenders aim for a profit growth rate of at least 20% or more in 2011.
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Pham Duy Hung, Chief Executive Officer of Vietnam Asia Commercial Bank, said his bank should achieve a profit at least twice that of last year now that the bank has lately spurred its paid-in capital from VND1.63 trillion (USD81.5 million) to VND3 trillion (USD150 million).
Meanwhile, the general director of another bank said that most of joint-stock banks faced high pressure of boosting profits although the year 2011 was expected to be tough for lenders. They have to diversify services to earn more profits rather than relying mainly on credit operation only, he added.
Vietnam Export Import Commercial Bank (Eximbank) this year sets a profit growth target of at least 26%, having attained a fairly high pre-tax profit last year at VND2.38 trillion (USD119 million), increasing 55% year-on-year.
Truong Van Phuoc, CEO of the bank, said that the bank should achieve at least VND3 trillion (USD150 million) in pre-tax profits this year, but the exact number would be decided at the next general meeting.
Military Bank-MB also targets a medium double-digit profit growth this year, although the bank’s deputy general director Cao Thuy Nga admitted that it is difficult to predict business conditions in 2011.
“There have been unexpected objective changes in recent years, and no one could have earlier predicted how the year 2010 would have been for banks. Therefore, banks are so prudent when rolling out the business plan for 2011,” she said.
The biggest issue affecting banking operation this year is new capital adequacy regulations which are stricter than earlier, so it will be difficult for bank to meet higher safety requirements while still attaining growth expectations, Nga said.
Military Bank, however, is aiming for a growth rate of 30%-40% for all targets this year. In 2010, the bank obtained up to VND2.1 trillion (USD105 million) in pre-tax profits compared to the initial plan of VND1.7 trillion (USD85 million), Nga said.
Last year was tough for banking operations due to many macro-economic factors including high interest rates and fast-changing forex rates, but lenders still posted high profit results. Asia Commercial Bank, for example, obtained VND3.1 trillion (USD155 million) in pre-tax profits, increasing 9% year-on-year, which Techcombank achieved VND2.75 trillion (USD137.5 million) in profits, rising 21%, and Maritime Bank earned VND1.7 trillion (USD85 million), increasing up to 151% year-on-year.
Stealing the spotlight last year were two State-owned banks, with Vietcombank obtaining up to VND5.43 trillion (USD271.5 million) in pre-tax profits, rising 21% from the previous year, and VietinBank achieving VND4.5 trillion in pre-tax profits, up 26%.
Smaller banks also enjoyed impressive profits growth, such as An Binh Bank earning VND638 billion (USD31.9 million) in pre-tax profits, up 55%, and VPBank seeing its profits double to VND700 billion (USD35 million).
