Techcombank Posts 75% Gain in 1st-Half Pretax Profit

Technological & Commercial Joint-Stock Bank (Techcombank), the Vietnamese financial services company partly owned by HSBC Holdings Plc, posted a 75% increase in first-half pretax profit as it expanded its banking network.

Techcombank, as the company's known, had pretax earnings of 551 billion dong ($33 million) in the six months ended June 30, Chief Executive Officer Nguyen Duc Vinh said in a telephone interview today, without providing year-earlier figures. The company said last year it earned 314 billion dong.

``In the first-half, we opened more branches nationwide, and now the number of branches almost doubled from the same period last year, and that boosted our profit,'' Vinh said.

The profit gain shows Techcombank's ability to expand its business in a market with 90 commercial lenders even as the central bank raised interest rates and increased the amount of funds banks must set aside as reserves to ease inflation.

The bank's results in the second half may show effects of the three interest rate increases by the central bank this year, and the country's inflation rate, which accelerated to 26.8% in June, the fastest since 1992. The Hanoi-based bank has 150 branches in the Southeast Asian nation's 28 provinces.

``This result hasn't yet reflected the real performance,'' said Hoang Xuan Quyen, chief analyst at Tan Viet Securities Inc. in Hanoi. ``Although most lenders, including Techcombank, have tried their best to mobilize capital amid the difficult economic situation, we need to wait for the results in the next six months because difficulties and challenges still lie ahead.''

Total assets more than doubled in the first half to 52 trillion dong, from 24 trillion dong last year, Vinh said.

Techcombank, of which London-based HSBC owns 15%, plans to raise 5 trillion dong by selling bonds in foreign markets, Vinh said in May. (Bloomberg)