VNStockNews.com - Despite substantial profit gains, revenue on assets (ROA) at around 1% and return on equity (ROE) at 10% is approximately 14-15% lower than that in South East Asia, said Le Xuan Nghia,Vice Chairman of Vietnam National Financial Supervisory Commission.
The ROE at international banks is normally at 17%.
Nghia believes that in market mechanism where profits will be shared among banks and enterprises and seldom could any administrative measures work. Should mobilisation rates be line with the ceiling rate of 14% per year, lending rates of around 22-23pct per year would then offer lucrative profits. Yet, the figures are currently staying at 17% and 20% respectively and the 3% difference is rather lower than in other countries such as Malaysia (4.5-5pct).
It is reported that credit activities which account for 70pct of the total profits are the principal drivers of such enormous earnings. Hardly has any huge difference been observed in the profit gains of banking sector and that of more than 500 listed companies. Such companies' average profits stay at 11% whereas commercial banks' are moderately at 10.5%.
