VietNamNet Bridge – A paradox exists that the bosses of small banks are very rich, while the big bankers complain that their salaries are too modest.

Big banks’ CEOs poorer…

President of the Bank for Investment and Development of Vietnam (BIDV) Tran Bac Ha complained that it is “difficult to live” with the ceiling monthly salary of VND36 million the State offers to the CEOs of state owned economic groups or general corporations.

BIDV has become a joint stock bank after the equitization, but the State still holds 95 percent of the bank’s stakes.

Under the current regulations, if CEOs fulfill their business tasks very well, they would receive VND54 million at maximum, or VND648 million a year.

The income level is just equal to the pay to Nguyen Thi Mai Thanh, President of the Refrigeration Engineering Enterprise (REE) or Doan Nguyen Duc, President of Hoang Anh Gia Lai group.

It is simply because Ha is the president of a state owned enterprise, while Thanh and Duc are the owners of private businesses. In fact, Ha’s income is much higher than the salaries offered to state’s civil servants.

However, analysts have pointed out that the actual incomes of the leaders of the big state owned banks, including BIDV, Vietcombank, Agribank and Vietinbank, the “big four,” are much higher than the declared levels.

In 2012, BIDV paid 0.45 percent of the post tax profit, or VND14.8 billion, to the members of the Board of Directors and Board of Supervision. The figure could be 0.44 percent of the post tax profit, or VND17.9 billion in 2013.

As such, every high ranking executive of the bank would receive VND1.2 billion a year, or VND100 million, which is much higher than the VND54 million level that Ha mentioned.

The VND70-100 million income is the average income for senior executives of the big banks, while presidents or CEOs earn much higher. The income of the bankers, of course, is much higher than the average income of Vietnamese, which is about $1,900 per annum as reported by the Prime Minister Nguyen Tan Dung at a meeting with Vietnamese development partners in late 2013.

…than smaller banks’ CEOs

However, it is understandable why Ha and state owned banks’ CEO’s incomes are modest: the money earned by his colleagues who work for joint stock banks is much higher.

In late 2013, Le Hung Dung, President of Eximbank, raised a big curiosity among the public when stating that he would cut his salary by 50 percent on a voluntary basis. People believed that Dung only accepted to cut down his income by 50 percent if his income was huge.

Eximbank’s reports showed that in 2012, every member of the Board of Directors and Board of Supervision received VND3 billion on average.

Every senior executive of ACB, Sacombank and Military Bank received VND192.6 million, VND149.2 million and VND87.3 million a month, respectively.

However, analysts believe that bankers’ incomes would be lower in 2013, when a lot of banks incurred loss or saw the profits down sharply.

Nguyen Duc Vinh, former CEO of Techcombank, is believed to be the banker who was offered the highest salary, about $1 million a year.

US$1 = VND21,000

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