Vietnam banks post booms in 2010

TN News

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Contrary to claims that those in the financial sector suffered last year, most Vietnamese lenders have recently reported profit growth in excess of 20 percent.

Vietcombank,  Sacombank and Habubank reported profit surges of between 21 and 27 percent. Although Techcombank had to lower its profit target once during the year, the bank still managed to post a 21 percent growth.

Other banks declared even better business results. Eximbank, for instance, reported robust profit growth of 55 percent.

VietinBank, one of the country's largest state-owned commercial banks, posted a pre-tax profit of VND4.37 trillion (US$224.3 million), representing a 48 percent jump over 2009.

The bank's 2010 earnings were equal to the combined profits of the previous ten years, VietinBank chairman Pham Huy Hung told news website VnExpress last week. The bank's total assets expanded by 53 percent; loan earnings were also high. Hung claimed that only 0.66 percent of loans turned out to be non-performing.

Experts said that many large banks enjoyed good profits last year because they were able to borrow from the central bank at very low interest rates and then lend out money to smaller banks at high rates.

Given this year's uncertainties, many banks said that they need to be cautious in setting profit targets.

Truong Van Phuoc, general director of Eximbank, said the institution is hoping to see a profit growth of at least 26 percent.

Cao Thuy Nga, deputy general director of the Military Bank, said new regulations have come into effect, requiring banks to comply with higher safety standards. That will make it harder to maintain high profit margins, she said.

Still, the bank hopes to see 30-40 percent growth this year, after posting a profit of VND2.1 trillion in 2010.

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