The year of 2005 has become the year of banks as local banks experienced an immensely profitable year, fueling the popularity of joint stock banks as they plan to issue more equities to foreign investor this year.
The biggest money maker was the State-owned Bank for Foreign Trade of Vietnam (Vietcombank), which obtained pre-tax profit of VND3.25 trillion (US$203 million). The bank’s net-profit posted at VND2 trillion (US$126.58 million).
The Industrial and Commercial Bank (Incombank), which is also a State-owned bank, came next with pre-tax profit of more than VND2 trillion (US$126.58 million) and net profit of VND538 billion (US$34.05 million).
The Bank for Agriculture and Rural Development (Agribank) registered a profit increase of 59.3 per cent over 2004, bringing the on-year increase of 40 per cent in staff salaries.
The Asia Commercial Bank (ACB) ranked first among joint stock banks with the largest profit with pre-tax profit of VND385 billion (US$24.37 million), an increase of 39 per cent from a year earlier.
Vietnam’s Technological and Commercial Bank, or Techcombank, registered the most impressive growth with a 170 per cent increase in pre-tax profits to reach VND286 billion (US$18.1 million).
Other joint stock banks such as the Vietnam Commercial Bank for Private Enterprises (VP Bank), the House Building Commercial Bank (Habubank) and Eastern Asia Bank also maintained high profit growth.
As a result, the joint banks were paying out more than 20 per cent dividends to their shareholders.
Earlier, official statistics also showed a sharply increase of foreign credit institutions in the country in 2005, of 45 per cent over 2004.
The spectacular performance may lead joint stock banks to sell more shares to foreign banks, experts said.
Le Dac Son, general director of VP Bank, said that selling shares to strategic investors is the quickest way to import international managerial experience. It also increases chartered capital, he added.
The sale of shares in joint stock banks to foreign investors has been given the green light by the central bank. In 2005, three joint stock banks, including ACB, Sacombank and Techcombank sold their shares to foreign investors for high prices.
The SBV reported that by the end of 2005, Vietnam had a total of 28 foreign bank branches, four joint venture banks and three financial leasing companies.
In 2005 alone, three foreign banks opened branches in Vietnam, including Cathay United, HSBC and Maybank.
Kieu Huu Dung, general director of the SBV’s Bank and Non-bank Credit Institutions, said the year 2005 witnessed the active participations of foreign banks with ANZ buying shares into Sacombank, Standard buying into ACB, and HSBC buying into Techcombank.
The foreign credit organizations have also expanded their services to Vietnamese customers, such as lending to buy houses and cars, and providing international credit cards.
Securities Investment, VNS
Vietnamese
