Commercial banks posted solid earnings in 2010 with an average growth in profit of over 20 per cent, most of which came from lending and foreign exchange trading.
Custormers make transactions at a Habubank's branch. The company is one of many joint stock commercial banks that gained more than 20 per cent in profits in 2010. — VNA/VNS Photo Tran Viet
HA NOI —
Partly-equitised Vietinbank posted a pre-tax profit of VND4.37 trillion (US$203.25 million) for the year, up 48 per cent over 2009, while Vietcombank also saw its pre-tax profit rise by 21 per cent to VND5.4 trillion ($252 million).
"Most of our profit came from credit operations, with institutional borrowers accounting for 70 per cent of total outstanding loans," said Vietinbank chairman Pham Huy Hung.
Maritime Bank reported robust profit growth of 51 per cent against the previous year, with a pre-tax profit of VND1.52 trillion ($70.69 million). Military Bank earned VND2.1 trillion ($97.67 million), a year-on-year increase of 50 per cent.
Eximbank, Sacombank, LienViet Bank, An Binh Bank and Habubank fetched profits of around VND613 billion to VND2.4 trillion, up 20-55 per cent against 2009.
However, profits of Asia Commercial Bank (ACB) grew by just 9 per cent in 2010, totalling VND3.1 trillion ($144.2 million).
ACB general director Ly Xuan Hai said the bank insisted on keeping lending interest rates low rather than racing other banks to increase borrowing costs.
"We see a profit of VND3.1 trillion as acceptable," Hai said.
However, some market observers assumed that ACB's profit growth slowed due to the Government shutting down its gold trading business which had been a key profit centre for the bank for years.
Ocean Commercial Bank reported a profit of over VND691 billion ($32.13 million) for 2010 and also exceeded profit forecasts for the year.
But the bank's general manager Trinh Van Tuan said opportunities would not come as easily as they had in the past two years given the tightening monetary policy.
OceanBank has set a profit target of VND1 trillion ($46.5 million) for this year, an increase of 44 per cent over 2010 but far lower than the 100-per-cent increase it saw last year.
Maritime Bank deputy director Nguyen Dinh Tung said difficult conditions seen last year would linger on into this year.
"Monetary tightening can cause difficulties for the banking system. High interest rates discourage customer borrowing," said Tung.
Tran Hoang Ngan, a member of the National Monetary Policy Advisory Council, said banks would face certain difficulties this year as the State Bank of Viet Nam had targeted to control credit growth at just 23 per cent in 2011, significantly lower than actual 2010 credit growth of 27.65 per cent.
Military Bank deputy director Cao Thuy Nga said the bank was targeting profit growth of 30-40 per cent this year. Meanwhile, Sacombank will ask shareholders next month to approve a target of VND2.8 trillion ($130.23 million) for this year, a figure that would constitute a year-on-year increase of 16 per cent. — VNS