Some bankers have revealed they have nearly fulfilled the 2018 business plan, saying high profits are foreseeable. Though the State Bank has not lifted the credit growth rate ceiling, banks still have a prosperous year thanks to increased revenue from non-credit services and bancassurance. 

The CEO of a large bank with charter capital of over VND5 trillion said the bank’s pre-tax profit had reached VND1.8 trillion by the end of September, very close to the profit target of VND2 trillion set earlier this year.

Can Van Luc, a renowned banking expert, believes that the profit of the banking system this year will be satisfactory, and is expected to increase by 20-25 percent.

The HCMC Securities Company (HSC) commented that 2018 is a ‘year of special growth’ for the banking sector. The State Bank’s credit tightening policy has had an impact on banks’ performance, but it was insignificant.

The pre-tax profit of listed banks is forecast to grow by 45.2 percent in 2018, higher than the 30 percent projected previously.

The credit growth rates of some commercial banks are lower than planned, thus affecting their profit, but the NIM (net interest margin) and non-interest income are higher. Non-credit services are expected to bring trillions of dong worth of revenue to Vietcombank, VP Bank and Techcombank.

Besides the revenue from interest and services, banks will also have irregular earnings from divestment deals. They will have to withdraw capital they contributed to other credit institutions to clear cross-ownership status as per the instruction of the State Bank.

Vietcombank, for example, is expected to collect trillions of dong from the divestment from Eximbank and Military Bank. Prior to that, the bank got hundreds of trillion of dong from the divestment from Saigonbank, Cement Finance Company and OCB, while Eximbank collected VND700 billion from selling Sacombank shares.

Vietcombank’s 9-month pre-tax profit far exceeded the profit of the entire year 2017, estimated at VND11 trillion. 

Meanwhile, Bao Viet Securities (BVSC) predicted that post-tax profit of Techcombank may reach VND8.243 trillion, higher than the targeted VND8 trillion. The bank is leading the bancassurance sector with 25 percent of market share, leaving other banks far behind.

StoxPlus reported that the banking sector gained a net profit of $1.53 billion in the first half of the year, or 64 percent of income of the previous years. The prosperity of the banking sector has helped make bank share prices bounce back. As of September, the bank share prices had increased by 22 percent since the beginning of the year.

However, bank CARs have not improved significantly. Only six out of 14 banks increased their charter capital by $613 million.

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