Commercial banks in Vietnam take more caution in setting profit targets this year, saying a modest rise in profits is likely despite huge difficulties spilling over from 2008 into the new year, local media reported.
Several bankers believed that profits in 2009 would be higher than last year when the banking industry experienced the worst volatility in both monetary policies and inflation. However, difficulties continue to go on as the global economic crisis will linger on.
Leaders of banks are under pressure to bring out better financial indicators each year, otherwise the bank will be put under the central bank's monitoring, while its reliability will also be damaged in foreign partners' eyes.
Nguyen Thanh Toai, deputy general director of the Asia Commercial Bank (ACB), said that 2009 would see more difficulties for banks than last year. However, the bank's profit this year would be higher than last year, although a specific rate of return was being weighed, he said.
Meanwhile, Chairman of Bank for Foreign Trade of Vietnam (Vietcombank) Nguyen Hoa Binh expressed his concern that the bank's profit this year might not increase against last year. Therefore, the bank is building a cautious business plan for submission to the general shareholder meeting this year.
Binh explained that manufacturing and trading enterprises as the bank's clients would face more challenges this year, so his bank would also see an impact.
The Bank for Agriculture and Rural Development of Vietnam (Agribank) in its business plan this year projects a profit growth target of 10 per cent against 2008, with revenue from non-credit services expected to grow 20 per cent. The bank's last year pre-tax profit was nearly VND2.44 trillion, rising 2.4 per cent from the previous year.
DongA Commercial Bank also eyes a modest profit growth target. Tran Phuong Binh, general director of the bank, said his institution expected the profit this year to increase by VND50 billion compared to last year's pre-tax profit of VND700 billion.
Most banks enter 2009 under harsh conditions due to the volatility of the market in the second half of the year.
Interest rates have strongly increased in the first half last year, only to be followed by a sharp plunge in interest rates in the second half. This sharp change has pushed lenders into a circumstance that the current lending rates are lower than borrowing rates.
Lenders' profits last year were mainly attributed to non-credit services such as money dealing. (Cafef.vn)
Vietnamese
