VietNamNet Bridge – Four state-owned commercial banks are considered the big guys in the banking sector, but there is no Number 1 bank.

Analysts say that the tasks assigned by the Governor of the State Bank of Vietnam Nguyen Van Binh to Vietcombank and VietinBank at their 2014 review conferences were different, though both of them are equitized banks in which the State still holds the controlling stake.

Binh said at Vietcombank’s conference that the bank has to soon become the “Number 1 Vietnamese bank”, affirming that this is a task the bank needs to fulfill.

At VietinBank’s conference, which took place some days later, the head of the central bank said he wished to see VietinBank to become “one of the two Vietnamese leading banks”.

There is a big difference between “the Number 1 bank” and “leading bank”.

Some banks have been granted the titles of the best banks in Vietnam in service fields by Asian and international prestigious journals such as Corporate Treasurer, Euromoney and Asian Banker. However, the Number 1 Vietnamese bank has not been found.

It is still unclear what the criteria is for banks to be recognized as the Number 1 bank. There are many leading banks in many different sectors, while there is no best bank in general which can satisfy all of the criteria.

Pham Quang Dung, CEO of Vietcombank, in a recent meeting with the press, spoke  about the plan to become the Number 1 bank in Vietnam. He said that Vietcombank is has the healthiest financial situation of all banks.

Meanwhile, the Bank for Agriculture and Rural Development (Agribank) would be the largest bank in terms of networks and total assets. And if considering chartered capital, stockholder equity and profits, VietinBank is leading banks in Vietnam.

Regarding profits, Vietcombank stood firmly for many consecutive years as the most profitable bank. However, Vietcombank’s profit growth rate was lower in recent years, while VietinBank has made a big leap.

The Bank for Investment and Development of Vietnam (BIDV), one of four big state-owned banks, has been emerging as a bank with high profit growth rates, while Agribank still lags far behind the other three.

In 2014, VietinBank reported pretax profit of VND7.3 trillion, Vietcombank VND5.68 trillion and BIDV VND6.065 trillion.

However, banks’ business efficiency should be measured by the ROE (return on equity) and ROA (return on assets) indexes.

The indexes of the state-owned banks are nearly the same. Vietcombank’s ROE was 10.5 percent in 2014 and the ROA was 0.9 percent. Meanwhile, the figures were 10.4 and 1.2 percent for VietinBank and 14.4 percent and 0.8 percent for BIDV.

TBKTVN