Nghiem Xuan Thanh, chairman of State-owned Vietcombank, said that by the end of June, his bank surpassed half of the profit target set for the year.
In the first half of this year, Vietcombank’s pre-tax profit rose to more than VND7.72 trillion (US$340 million), up 52.7% year-on-year and equivalent to 55.2% of the bank’s annual target.
Vietcombank’s other financial indicators of net interest margin (NIM), return on average asset (ROAA) and return on average equity (ROAE) also improved sharply against 2017. Accordingly, VCB’s NIM reached 2.76%, ROAA 1.24% and ROAE 22.71%.
Pham Manh Thang, deputy general director of Vietcombank, said that taking into account Vietcombank’s business performance in the first six months and its positive prospects, the bank is expected to exceed all targets set for this year.
The results are thanks to a shift in the bank’s investment focus away from wholesale banking services and towards the retail banking segment, while non-performing loans (NPLs) were tamed below the permitted threshold of 3%, Thang added.
The Bank for Investment and Development of Vietnam (BIDV) also reported acceleration in performance in H1 with a strong profit surge of 24.7% to VND4.05 trillion, equal to 54% of its annual target.
The Bank for Industry and Trade of Vietnam (VietinBank)’s profit in H1 also increased by 8% year-on-year to VND5.2 trillion, following more efforts put into tackling NPLs.
Le Duc Tho, general director of VietinBank, said during the first half of this year, VietinBank repurchased its entire bad debts that it previously sold to Vietnam Asset Management Company (VAMC).
Tho said that his bank was on track to achieve its target set for 2018, especially in capital mobilisation, which is higher than the average growth rate of the banking industry.
Business performance of private commercial banks in the first half of this year also witnessed impressive results.
Vietnam International Joint Stock Commercial Bank (VIB) reported pre-tax profit of VND1.15 trillion, up three times from the same period of 2017. Contributing the most to the profit growth of VIB in H1 was the operation of retail banks with revenue increasing 100% from the same period last year.
VIB’s credit quality in the period also improved with its provisioning costs maintained at a low level of VND234 billion despite a 8.94% credit growth.
VPBank’s after-tax profit also surged sharply by 34% against the same period last year to more than VND4.37 trillion. By the end of the second quarter, the bank’s return on asset (ROA) and return on equity (ROE) were at 2.46% and 22.36%, respectively.
Tien Phong Joint Stock Commercial Bank (TPBank) reported pre-tax profit at VND1.02 trillion in H1, a rise of 121% year-on-year and exceeding its six-month target by 12%.
As of the end of June 2018, TPBank also had total assets of more than VND126.5 trillion while its charter capital increased to VND6.718 trillion, up VND876 billion.
Economist Nguyen Tri Hieu attributed the bank’s impressive profits in the first half of this year to the high credit growth, the improvement from the retail banking segment and the country’s high economic growth.
Hieu forecast that banks’ profits would rise further in the remaining months of the year.
A recent survey by the State Bank of Vietnam also showed that a majority of commercial banks expect an upward trend in their business in the remaining months of the year.
According to the business sentiment survey, which covered domestic and foreign commercial banks operating in the country, 76.1% of respondents expected better results in the third quarter, while 82.6% hoped their business performance throughout 2018 would improve further compared to last year.
Eighty-eight percent of the respondents predicted their pre-tax profit in 2018 would rise compared to last year, helping the average growth rate of the entire banking system to reach 19.05%, higher than the 18.2% forecast in the previous survey conducted in May.