Commercial banks are projected to maintain their momentum of profit growth during 2019, primarily driven by digital banking applications.

Digital banking is said to give a big push to commercial banks' profit growth. 

Although commercial banks are not set to release their official growth and profit targets for 2019 until their general meetings with shareholders, slated for April, an optimistic outlook for the profits of commercial banks lies ahead in 2019, according to a reference by Vietnam Economic Times to bank officials.

So far, two commercial banks have set out their target estimates for 2019. 

Vietcombank plans to increase profits this year by 12 per cent to VND20.5 trillion (US$896.84 million) while HDBank embraces an estimated VND5.077 trillion (US$222.11 million) in pre-tax profits, up 26 per cent against the previous year.

Both commercial banks saw profits surge by some 64 per cent in 2018.

Most commercial banks are cautious in putting out their 2019 targets as the growth credit is still kept under close watch by the State Bank of Vietnam. Additionally, high risks regarding unpredictable developments in the world market are imminent and could result in adverse impacts.

Nguyen Dinh Thang, chairman of LienVietPostBank, outlined his high hopes of free trade agreements to which Vietnam is a signatory, explaining these trade pacts would help to initiate a wave of foreign investment into Vietnam, thus giving a big push to domestic production and sales. 

Thang elaborated further by identifying that better prospects could lay ahead for the growth of both enterprises and banks in 2019 if they are proactive in the opportunities presented.

Nguyen Le Quoc Anh, CEO of Techcombank has high expectations regarding the growth of retail and service sectors which commercial banks are pursuing.

Meanwhile, Do Minh Phu, chairman of TPBank voiced his belief that digital banking would act as a catalyst to cutting down operation costs and subsequently lower cost-to-income ratio.

Digital banking helps to slash costs when expanding a bank’s network, therefore improving the competitiveness of commercial banks.

Digital banking is set to remain a buzzword in 2019. Along with mobile and internet banking, electronic wallet applications have emerged as a trend which is set to drive the future of payments. 

Digital banking applications also are said to create spillover effects on the growth of divisions of commercial banks.

VOV