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VietNamNet Bridge – Though having experienced a year will full ups and downs, most of commercial banks have reported big profits. This has bolstered the viewpoint that banking remains the most profitable sector in Vietnam’s economy.
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Vietcombank seems to be quiet, but its profit is even bigger than Vietinbank’s. Some other banks still have not revealed the figures as they are still awaiting auditing results, but Asia Commercial Bank, Sacombank and Eximbank are sure that they have fulfill their yearly business plans
Nguyen Thanh Toai, Deputy General Director of ACB Bank, said that “the yearly business target is reachable” (the 2010’s targeted profit was 3600 billion dong). Meanwhile, a manager of Eximbank said that the profit the bank gained in 2010 was a bit higher than 2300 billion dong.
Several days ago, Cao Thuy Nga, Deputy General Director of the Military Bank, said the actual pre-tax profit of her bank in 2010 was 2100 billion dong, higher than the targeted level of 1700 billion dong. As for Techcombank, a source said that the 2010’s profit was 3000 billion dong.
Not only giants, but also younger banks have also reported satisfactory profit for 2010. Deputy Chair of Lien Viet Bank Nguyen Duc Huong said that the bank’s pretax profit reached over 800 billion dong. In terms of the ratio of pretax profit on the average chartered capital, Maritime Bank is leading with 46 percent.
OceanBank, for the first time since it shifted to operating as an urban bank, has announced the business result for 2010. The bank was satisfied with the profit of 691 billion dong in 2010 and with other “beautiful business indexes”.
An Binh Bank reported the pretax profit of 638 billion dong, and SHB 600 billion dong.
Where does the profit come from?
2010 was considered a year full of ups and downs. However, banks still got big profit. How?
Cao Thuy Nga from Military Bank said that the bank’s main sources of income are credits, the lending on the interbank market, guarantee fees and foreign currency trading.
Nguyen Thanh Toai from ACB said that the bank’s income mostly came from credit and services. Nguyen Duc Huong from Lien Viet Bank said that many banks relied on the lending.
However, the question is why some banks could profit from lending, while others could? Nga said that banks needed to be very flexible in their business plan. For example, in the first half of 2010, when the state bank tightened the liquidity, the Military Bank focused its activities on the capital market and did not try to expand credit. In the second half, when the monetary policy was loosened, the bank pushed up the credit.
The gap between powerful and weak banks has become wider. The foreign currency fever in 2010 alone could help big banks earn big sums of money. The banks with profuse capital just needed to lend on the interbank market to earn big profit. Meanwhile, many small banks tried to push up credit and as the result, they faced too many risks.
Banks also offer biggest Tet bonuses to their staff. In 2009, director of the Hanoi branch of a HCM City-based bank, got the Tet bonus equal to the value of a Honda Civic. However, that was nothing compared with this year’s Tet bonus. Manager of a big joint stock bank told Tien phong reporters that the director of the HCM City Branch of his bank would get the Tet bonus of 1.2 billion dong, equal to 16-month pay
Source: Tien phong
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