Vietnam banks cut salaries, jobs as lending remains sluggish

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The Vietnam Export-Import Commercial Joint Stock Bank, or Eximbank, has responded to sluggish profit growth with its chairman volunteering a pay cut of 50 percent.

Besides Le Hung Dung, whose salary cut was announced at a press briefing November 14, general director Nguyen Quoc Hung's salary would decline by 30 percent.

Meanwhile, there have been reports of rumors that Eximbank plans to lay off 1,000 employees.

But Dung rejected this.

He admitted, though, that the bank began cutting jobs in September.

It has eliminated 48 jobs and deputed 300 senior employees to branches to boost retail lending.

Dung said those of them found incompetent after three to six months would be fired.

Laying off staff is "normal" during times of sluggish lending growth, he added.

Eximbank expects pre-tax profit of just VND1.5-1.6 trillion this year, or just half the target, after reporting VND800 billion in the fist half.

Many other banks too are cutting wages and jobs.

In the first six months ACB, BIDV, SHB, and Vietinbank shed a total of 1,200 jobs.

ACB, short for Asia Commercial Bank, saw pre-tax profit decline by over 50 percent year-on-year in the first half.

Layoffs, both forced and voluntary, at the bank in just the last quarter exceeded 700.

Nguyen Thanh Toai, its deputy general director, told Tuoi Tre newspaper that while some employees quit on their own, the bank laid off apprentices since it has shelved expansion plans given the tough conditions.

Late last year senior executives voluntarily took a 25-percent pay cut.

Tough time

According to the State Bank of Vietnam, in the first half 24 out of the country's 124 banks and financial companies reported losses, while 57 others saw profits decrease.

Governor Nguyen Van Binh said credit had grown 7.18 percent as of October end, a far cry from the year's target of 12 percent.

Banks fear low profits this year as they restrict lending to avoid bad debts.

The central bank had estimated non-performing loans at 4.64 percent as of August end on total loans of VND3,290 trillion (US$156 billion).

As of November 10 the state-owned asset management firm VAMC has bought VND15.7 trillion ($744.65 million) worth of debts from 15 banks.

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