VietNamNet Bridge – A lot of commercial banks have announced that they have fulfilled the 2010 business plan even when the year has not come to the end. Meanwhile, some other banks are “sprinting” the final length of the road, and some banks have anticipated that they will fail at fulfilling the business plan.

Two months ago, assistant to the general director of a commercial bank contacted Thoi bao Kinh te Vietnam’s newspaper to seek information. The bank’s board of management was compiling the report for the meeting with the board of directors’.

The information stated that at that time many banks had to lower the targeted profit plan, because they were facing too many difficulties and were convinced that they would not fulfill the business plan. How many such banks were there? Some insiders said initially seven banks had to lower the profit plan, and later on the number then increased to thirteen. However, experts believe that thirteen would not be the final figure.

“We will not lay down our arms”

This was the affirmation of the managers of Eximbank at the end of the third quarter of 2010, when banks began encountering many difficulties.

At that time, banks began “shrinking” in their operation when the exchange rate began fluctuating heavily, and they had to meet the requirements on new capital adequacy ratio stipulated in the Circular No 13, forcing them to scale down lending in gold.

Earlier this year, Eximbank set the target of obtaining 2.2 trillion dong in pretax profit. By mid December, the pretax profit of the bank had reached 2.3 trillion dong already.

Meanwhile, Sacombank has reported the profit of 2.192 trillion dong for the first 11 months of the year. The bank’s Chair Dang Van Thanh believes that the profit for the whole year 2010 would exceed the targeted level of 2.4 trillion dong.

Other banks, including Military Bank, Dai Duong Bank, An Binh Bank and Habubank, also announced two months ago that they will fulfill the business plan.

A securities company recently released a comment that while banks are facing big difficulties in the fourth quarter of the year, there is a “positive factor” that support banks’ operation – the rise of the VN Index on the stock market from 420 points to 497 points. The rise has been serving as the motivational power that helps banks fulfill their business plan.

Some questions remain open

If keeping a close watch over banks’ profit in recent years, one would pay attention to two cases, Techcombank and Maritime Bank.

Maritime Bank once reported a very high ROE figure at 50 percent in 2009, while the average figure of the banking system was only 20-22 percent. Techcombank has gained a reputation as the bank which has a stable profit and impressive business results. However, sources have said that Techcombank has sharply reduced the targeted profit from 3.207 trillion dong to 2.8 trillion dong. However, in the prospectus released in early December for the plan to issue bonds, the targeted pretax profit was still at 3.467 trillion.

Questions about the capability to fulfill proposed business plans has also been raised for some other banks, including Viet A Bank and Dong A Bank. Sources said that Viet A Bank is likely not to obtain the targeted profit, while Dong A Bank’s profit may not far exceed 2009’s level of 750 billion dong, while its targeted profit is 1.100 trillion dong.

To date, banks have refused to give concrete answers.

Source: Thoi bao Kinh te Vietnam