Vietnam's VPBank expects 57 pct jump in 2011 gross profit

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Vietnam Prosperity Bank, 15 percent owned by Oversea-Chinese Banking Corp , expects its gross profit to jump 57 percent to VND1.04 trillion (US$50 million) this year.

The Hanoi-based bank, also known as VPBank, has cut its pretax profit target from an initial plan of VND1.35 trillion due to the government's tightening of macro policies to fight inflation, the bank said in a statement dated April 20.

The government has cut Vietnam's annual credit growth target to below 20 percent this year to curb inflation, from an initial target of 23 percent, following a rise of 27.65 percent in 2010.

VPBank said it was aiming for a deposit growth of 50 percent this year while keeping lending pace at 20 percent, following approval by shareholders at an annual meeting on Tuesday.

The bank could only reach its profit plan if the central bank applies no stronger management tool, such as raising the compulsory reserved ratio, VPBank Chief Executive Officer Nguyen Hung wrote in the annual report sent to shareholders this month.

If the reserves ratio were to be raised, "the market liquidity will be very tight and banks will have to sacrifice their profit targets to ensure payment ability," Hung wrote.

VPBank said in the statement it planned to raise its registered capital by 26.3 percent to VND5.05 trillion this year to boost financial strength for expand operation.

Last year, VPBank's pretax profit jumped 73 percent to VND663 billion from 2009, while its total assets more than doubled to VND59.81 trillion.

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