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Banks almost to finish line   2009-08-11 - VietNamNet/TBKTVN

Most banks have reported satisfactory business results for the first seven months of the year and are confident they will exceed their profit targets for the year.


Maritime Bank has reported the pretax profit of 685 billion dong in the first seven months of the year and the profit of 555 billion dong after provisioning, which is equal to 222 percent of the same period of 2008 and nearly 100 percent of its 2009 target.


ABBank has reported the pretax profit of 38.4 billion for July 2009, an increase of 38 percent over June 2009. As such, the bank got the profit of 211 billion dong in the fist seven months of the year.

Techcombank has announced the impressive pretax profit of 1,221 billion dong for the first seven months of the year after provisioning. The bank got 190 billion dong in July alone. It expects to obtain the high profit of 2,200 billion dong this year, or 110 percent of its yearly plan.

Saigon Bank has reported the pretax profit of 450 billon dong, up by 17.64 percent over the same period of 2008.


Though commercial banks are certain they will able to fulfill their yearly business plans, experts say that the profit levels will not be high.


Duong Thu Huong, Secretary General of the Vietnam Banking Association, said that the difficulties in the monetary market in 2008 forced banks to be reserve when setting business plans for 2009.


The profit targets banks set for themselves for 2009 are not high, just equal to those of 2008 or a bit higher. Therefore, it is not a surprise at all to hear banks reporting the early fulfillment of their 2009 goals.


Huong also pointed out that the interest rate subsidisation programme has helped banks obtain stable growth this year.


The question now is whether banks can continue to earn profit in the last months of the year as the State Bank of Vietnam has asked them to control credit and improve credit quality.


Dam The Thai, Personal Banking Director of ABBank, said that commercial banks will be more cautious when providing loans.


“ABBank, for example, has been tightening control over consumer loans and capital for real estate and securities investments,” Thai said.


However, analysts say the credit tightening does not mean that banks will not gain profit in the time to come. According to the deputy general director of a joint-stock bank, there will two big advantages for banks in the last months of the year.


Firstly, the last months of the year are always when businesses stock up on goods to sell over Christmas, New Year and Tet, which means that businesses will have a high demand for capital. In general, banks’ business results in the second half of the year are always better than in the first half.


Secondly, the interest rate subsidisation programme will be continued, while the recovery of the national economy will facilitate the operations of banks.


“I cannot see any reason that banks’ business will become worse in the last months of the year,” he said.

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