Many banks reported profits of thousands of billions of dong.
2011 was a difficult year for the banking industry, but many banks still announced profits of thousands of billions of dong. However, many banks said that this profit is not high compared to the owner's equity.
Chairman of the Board of Directors of Vietinbank Pham Huy Hung informed that in 2011, this bank achieved pre-tax profit of 8,105 billion VND, an increase of 76% compared to 2010. Compared to the previously expected figure of 8,500 billion VND, the actual figure was lower, but Vietinbank still won the "champion" position in terms of profit in 2011 up to now.
Mr. Nguyen Ngoc Bao, Chairman of the Board of Members of Agribank, also said that the profit of this unit in 2011 was only equivalent to 2010. In the context of difficult business, it is a good thing that banks can maintain high profit levels. According to him, along with maintaining growth and good liquidity, by the end of 2011, Agribank's bad debt fell below 6%, down from 6.67% of the previous year.
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Overcoming a year considered to be difficult and bumpy, many banks still announced relatively positive profit levels. Photo: Tue Minh. |
Vietcombank also announced a profit of up to 5,700 billion VND for 2011, only a 4% increase compared to the previous year; Sacombank by the end of November 2011 had reached 2,618 billion VND. Other large banks such as Eximbank, ACB, Military Bank, Techcombank... also expected to have a profit of approximately 3,000 billion VND or more.
Chairman of the Board of Directors of Vietinbank Pham Huy Hung said that the bank's profit growth target for next year is 20% compared to 2011. Vietinbank's pre-tax profit in 2012 is expected to be 9,726 billion VND. Meanwhile, Vietcombank set a target of having a pre-tax profit of about 6,500 billion VND in 2012.
Some mid-sized banks have more modest profits, but also reach thousands of billions of VND. VPBank representative said that by December 31, 2011, the bank's consolidated pre-tax profit reached over 1,600 billion VND, exceeding 2010 by about 70%. Although the target for 2012 has not been set, VPBank representative informed that most of the profit does not come from lending activities.
Although the bank announced a profit of thousands of billions for 2011, many bank representatives said that compared to the equity capital of 5,000-6,000 to tens of thousands of billions of dong, the profit rate is not high, only about 15%, and a few banks are only over 20%. "If compared to businesses with very little equity capital that only rely on loans, the bank's profit rate on equity is much lower," said the vice chairman of the board of directors of a bank in Hanoi.
Meanwhile, former Governor of the State Bank Cao Sy Kiem said that assessing the profits of banks must be based on the level, speed as well as charter capital and total assets. If profits skyrocket in both speed and level in difficult conditions like 2011, it needs to be reconsidered.
Mr. Kiem believes that currently, in the joint stock banking sector, only one-third have good quality, deserve to have really good profits, one-third are ranked average and the rest are at risk of losing liquidity, bad debt increases. According to him, it is necessary to clarify the "achievement-oriented" profits and the real numbers of banks. Achievement profits can come from banks transferring debt, lending easily, hiding information data..., Mr. Kiem predicts. According to this expert, in the short term, it can be seen that the profit numbers are good, but in the long term, some banks are at risk of real big losses.
Previously, answering questions from National Assembly delegates, State Bank Governor Nguyen Van Binh said that a more comprehensive assessment is needed if banks are to be said to have large profits. According to him, the profit of 1,000 - 2,000 billionVND per year compared to the charter capital of 3,000-5,000 billion with total assets of about 50,000-60,000 billion is still low. He said that, after many years of evaluation, the profits of Vietnamese banks
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