|Vietcombank’s pre-tax profits hit record high of more than VND11.1 trillion (476.39 million USD) in H1 2019. (Source: VCB)
Among the group of large-sized banks, Vietcombank’s pre-tax profit hit a record high of more than 11.1 trillion VND (476.39 million USD) in the first half of 2019, meeting 54 percent of the bank’s annual plan. The value was nearly equal to the bank’s profit gained in the whole of 2017.
Vietcombank’s profit was also expected to be the highest in the entire banking system in the first six months of this year.
Vietcombank’s impressive results were attributed to the bank’s success in pursuing strategies to strongly shift from wholesale to the retail banking segment, boost capital for investment activities and increase the proportion and revenue from services over the past three years.
Notably, the high profit was gained after Vietcombank spent some 3.3 trillion VND (141.6 million USD) for provisions of risky loans in the first half of this year. The bank’s non-performing loan ratio was low at only 1 percent of total outstanding loans by the end of June.
Vietcombank this year plans to gain profit of 20 trillion VND (858.14 million USD) and the bank’s chairman Nghiem Xuan Thanh said that the target was feasible and it might even reach a higher value of up to 1 billion USD.
As for the group of medium-sized banks, TPBank also posted a record high in profit with 1.62 trillion VND in the first half of 2019. The value was 1.5 times higher compared to the same period last year and met 50.6 percent of the bank’s annual plan.
In the group of small banks, Nam A Bank was the first bank to announce the first half’s business performance results with a profit of 440 billion VND, equal to 55 percent of bank’s yearly plan. The value inched up compared with a profit of 426 billion VND that the bank released by the end of May.
According to Nam A Bank’s general director Tran Ngoc Tam, the profit in June was lower than monthly profit in the previous five months because the bank boosted spending on information technology investment and opened more branches in June.
Earlier, experts were concerned that Vietnam’s banking sector earnings growth would likely moderate this year following a sterling year in 2018 due to the central bank’s policies to tighten loan growth. Banks were also expected to tighten lending towards riskier ventures in anticipation of the Basel II standards and this would weigh on loan growth.
In addition, they forecast Vietnam's economic growth was unlikely to be spared from the global economic slowdown and the slowing economic activity amid a dimmer growth outlook would thus weigh on credit demand.