HCM City Banks Likely to Double Profits This Year

Net profits of all commercial banks in Ho Chi Minh City in 2005 may double last year's figures, according to the latest report released by the State Bank of Vietnam (SBV) in the city.

 

The report showed that the system of commercial banks there has gained some VND3.9 trillion ($246.8 million) in net profit over the first nine months of this year, an increase of nearly 53.9 per cent compared with the earnings of the entire 2004.

 

Tran Ngoc Minh, branch director of the SBV in Ho Chi Minh City, said that the tighter monetary policies and expanded financial capacity have helped banks’ profits in the city as well as in the country increase year-on-year.

 

Furthermore, growing profits have also resulted from stricter State management through international standardization, the banks' urgent mobilization to meet the social demand for investment, gradually narrowing the gap in financial capability between local and international commercial banks, he said.

 

A sharp rise in profitability has made investors trade shares of commercial joint stock banks on the `free market' at prices that exceed their original face value.

 

The Vietnam Export Import Joint Stock Bank {Eximbank), after announcing profit gained in the first 10 months at VND180 billion, has seen its stock prices rising to VND2.5 million per share from the VND1 million face value, up 121 per cent from one year ago.

 

The shares of Asia Commercial Bank (ACB) late this year skyrocketed to VND2 million per share, two-fold against its face value, said the bank general director Vo Van Chau.

 

He said that ACB posted profit of VND55 billion by the end of October this year, up 28 per cent against 2004.

 

Upward profit and sharp stock price hikes have also been seen in the Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank), Eastern Asia Commercial Joint Stock Bank (EAB), Vietnam Commercial Bank for Private Enterprises (VPBank), and Vietnam International Bank (VIBank).

 

The State bank official said that commercial banks in Ho Chi Minh City are expected to mobilize some VND181.9 trillion ($11.5 billion) from residential savings, payment deposit and bonds by the end of this year, an increase of 20.4 per cent against 2004.

 

Commercial joint stock banks have attracted almost VND5.3 trillion ($335.4 million) in capital from shareholders' contribution, Minh said.