In spite of adverse impacts arising from the global economic crisis and unsatisfactory credit operations, banks in Vietnam still report positive earnings.
Good growth
Lien Viet Bank expects to bag VND560 billion in pre-tax profit in 2009, including VND542 billion in the first 11 months of 2009, as much as 17 % higher than the annual plan of VND465 billion. The lender’s assets are expected to reach VND15,302 billion. The impressive growth is an important foundation for the realisation of the ambition to turn Lien Viet Bank into a chaebol, which is being prepared in the report to the 2010 Annual General Meeting. The Extraordinary General Meeting held on 22 Nov 2009 also approved the issue of VND2,000 billion of convertible bonds in the local dong currency and several key issues. In November, Lien Viet Bank officially completed the chartered capital rise from VND3,300 billion to VND3,650 billion.
Continuing with steady growth in the previous months, with a profit before tax of VND47 billion in November, ABBANK is moving forward to realise the earnings target set for 2009. At the end of November 2009, ABBANK made VND374 billion in pre-tax profit, fulfilling 94 % of the yearly plan. Other financial indicators had solid growths: total assets of VND24,101 billion, outstanding loans of VND12,104 billion and total deposits of VND13,844 billion.
Maritime Bank said, as of November 30, its pre-tax profit was equal to 147 % of the plan set for 2009 and up 213 % from a year earlier. The lender’s total assets also reached 123 % of the 2009 plan and exceeded 197 % from the amount in 2008. Its deposits climbed to VND49,000 billion, equal to 203 % of the result in the corresponding period of the previous year.
Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) also boasted its 11-month profit in excess of the annual plan. After deducting financial investment provisions and credit risk provisions, the profit totalled VND1,658 billion, or 104 % of the plan. Particularly, the lender’s mobilised capital amounted to VND80,031 billion and its outstanding loans soared to VND55,972 billion. Also as of end November 2009, Sacombank’s assets totalled VND98,768 billion while nonperforming loan (NPL) was 0.68 %.
Foreign-invested banks in Vietnam also made impressive earnings. According to the State Bank of Vietnam (SBV), foreign credit institutions in Vietnam currently include 45 branches owned by 33 foreign banks, 5 joint venture banks with 20 affiliated branches, 5 wholly foreign-owned banks, and 8 foreign-led nonbank credit institutions. Besides, there are 56 representative offices opened by many other credit institutions.
SBV said foreign credit institutions in Vietnam have made good results in incomes, asset growth, capital mobilisation and credit growth. In 2009, foreign bank branches and wholly foreign-owned banks are expected to earn VND2,612 billion in pre-tax profit, deposits and outstanding loans will rise 17.8 % and 10,8 %, respectively, and total assets will expand 14 % from end-2008 at the end of 2009. Operations of joint venture banks are expected to be very good as well, with VND477 billion of income before tax, deposits will climb 18.2 %, outstanding lending will jump 34.3 % and total assets will increase 18.3 % from end-2008.
Non-bank credit institutions reported a rise of 17.5 % in capital mobilisation in the first 10 months, a growth of 41.8 % in outstanding lending and asset growth of 40.5 % from end-2008.
Key activities in 2010
At a recent year-end conference in Hanoi to review banking performances in 2009 and chart out the tasks of the banking sector for 2010, Deputy Governor of SBV Tran Minh Tuan said: During 2009, despite many difficulties and challenges caused by the global financial and economic crisis, the whole banking sector with its enormous efforts has obtained remarkable results. In particular, the SBV has managed the monetary and exchange rate policies in line with the targets set by the Government. The legal framework of monetary and banking operations has continued to be improved. International cooperation in the banking field has been highly valued by the international community. The non-cash payment, technology and banking services have been extended, etc.
SBV Governor Nguyen Van Giau said, in 2010, the total liquidity and credit outstanding for 2010 will rise by 25 % as compared to the end of 2009; the interest and exchange rates will be managed at reasonable levels in line with macro-economic growth while ensuring stable and prudent banking operations.
In his key note address, Prime Minister Nguyen Tan Dung said that the achievements of the banking sector in 2009 would be prerequisites for the successful implementation of the objectives set out for 2010. However, he held that due to the slow recovery of the global economy while the country’s key goal is to ensure macro-economic stability with the set GDP growth rate of 6.5 % in 2010 (higher than that of 2009), thus burdening a heavy task on the banking sector. Therefore, the Prime Minister instructed the SBV to urgently implement a specific action plan with a focus on the following issues. SBV should better play the role of a central bank, advise and manage the monetary policy more flexibly and promptly in order to enhance macro-economic stability, control inflation, and obtain a higher growth rate than that of 2009. To this end, the whole banking sector should closely monitor and promptly forecast the macroeconomic developments of the domestic and international financial and money markets so as to take proper measures and handle arising difficulties.
Besides, SBV needs to enhance the state management of a central bank; review and improve the institutional mechanism of monetary and banking operations by completing the drafting of the Law on the State Bank of Vietnam and the Law on Credit Institutions to be submitted to the 12th National Assembly for approval in its 7th session; and strengthen supervision to ensure safe and sound banking operations in order to meet the requirements of the state-regulated market economy and the renovation of banking operations in the context of international integration.
Additionally, SBV should play the better role as the owner of the state-owned commercial banks in order to ensure that these banks continue to function as the core force of whole banking industry in effectively implementing the common objectives. Moreover, SBV should focus on training and retraining human resources, and upgrading governance; prevent all negative and corrupt behaviours; and enhance administrative reform.
P.V
Vietnamese
