Commercial banks currently find the possibility of attaining a high profit growth in the remaining months of 2009 low as the State Bank of Vietnam started tightening credit activities to curb credit growth at 25%-27% this year.
Credit tightening will eat up revenues of commercial banks from stock, realty, and consumer lending, which all have contributed significantly to the satisfactory business results that lenders saw in the first half.
A race to increase the deposit interest rate, meanwhile, has put pressure on banks, which are allowed to provide loans at the ceiling rate of 10.5% per year.
Local banks have scrambled to raise deposit interest rates to mobilize funds with the highest rate being offered at 10.3% by the HCM City Housing Development Joint Stock Bank for a 36-month term, close to the ceiling lending rate.
Almost all commercial banks headquartered in Hanoi and HCM City recently reported high profits in the first seven months of this year.
Maritime Bank reported a net profit of VND555 billion after provisioning, equal to 222% of the same period in 2008 and nearly 100% of its 2009 target.
Meanwhile, Techcombank announced an impressive pretax profit of VND1,221 billion for the first seven months of the year after provisioning. The bank expects to attain a high profit of VND2,200 billion this year, or 110% of its yearly plan.
“It is not a surprise for banks to report the early fulfillment of their 2009 goals as profits projected by banks for the year are not high, just equal to those of 2008 or a bit higher,” Duong Thu Huong Secretary General of the Vietnam Banking Association said.
Difficulties in the monetary market in 2008 forced banks to be reserved when setting business plans for 2009, Huong explained.
Huong also pointed out that the interest rate subsidization program has helped banks obtain stable growth this year. (Investment)
Vietnamese
