VNStockNews.com - Although the economy is still facing many difficulties, the operations of banks seemed not to be affected much. This explained, in recent time, when the credit operations have suffered many hardships, many banks still gained high profit.
The evidence was that in 2010, almost small and large banks exceeded the year's plans.
For example, Asia Commercial Joint Stock Bank (ACB) earned 3.1 trillion dong of pre tax profit, Vietnam Export Import Commercial JS Bank (Eximbank-EIB)'s pre tax profit at 2.38 trillion dong, increasing 55 percent over the previous year, Vietnam Technological Commercial JS Bank (Techcombank) gained profit of 2.75 trillion dong, rising 21 percent year-on-year, Military Bank (MB) reached the pre tax profit at 2.1 trillion dong while the year's target at only 1.7 trillion dong, Maritime Bank's profit at 1.7 trillion dong, up 151 percent y-o-y, An Binh Commercial JS Bank (ABBank)'s figure was 638 billion dong, up 55 percent y-o-y, Vietnam Prosperity JS Bank (VPBank)'s profit doubled against 2009's to reach 637 billion dong.
Notably, Vietnam Commercial JS Bank for Foreign Trade (Vietcombank-VCB) earned 5.43 trillion dong of pre tax profit, growing 21 percent y-o-y and Vietnam Commercial JS Bank for Industry and Trade (Vietinbank-CTG) also posted 4.5 trillion dong of pre tax profit, a year-on-year rise of up to 26 percent.
With satisfactory business results in 2010, lenders not only large banks but also small and medium-sized banks showed their ambitions when setting brisk profit targets in 2011.
How can banks achieve high profits when the credit operations of saving and lending of the banking system seemed to be paralysed for a long time? Most banks have a common answer: the profit from credit operations is no longer the key contribution to banks' income.
Particularly, profit from credit operations at banks accounted for about 30-40 percent of the total income while the profit from non-credit has been adjusted to account about 40-60 percent and the remaining will be from other operations. Thus, banks are confident to give the satisfactory profit targets in 2011.
Nguyen Hung, VPBank's general director said that his banks will focus on development investment and new products and expects to increase the bank's profit ratio from non-credit operations to 50-60 percent of its total income this year. Therefore, the bank targets a pre tax profit at 1.2 trillion dong this year.
According to Pham Duy Hung, Viet A Commercial JS Bank (VietABank)'s managing director, his bank's profit this year may double the figure in 2010. Similarly, Truong Van Phuoc, Eximbank's general director, also said that banks would reach at least three trillion dong pre tax profit this year, growing about 26 percent y-o-y.
However, specialists still said that 2011 would be still a tough year for the banking operations because banks' specific business operations are somewhat being narrowed and the network development of the banking system will be limited amidst the swelling risks (liquidity, FX rate, legal and operation).
In fact, the foreseeable risks have been clearly showed in the income from gold trading and FX rate operation, services, stock investments or even the dividend income from stake purchases.
In addition, some key solutions given by banks are to improve the credit growth and quality to increase the income from profit. But, together with the narrowed margin profit ratio, the credit growth also faces many difficulties when the common situation is going slowly and prolonging from early this year.
Thus, undergoing 2010 and the facts in 2011, although the year's targets may be fulfilled as expected, banks will still have to face pressure on the benefits of shareholders, rather than a heavy figure on the feasibility and safety.
