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Banks afraid to declare profit   2008-06-20 - VNN

A lot of banks are refusing to declare their monthly business results as the happenings of the monetary market have been badly affecting their operations.

Last year, when the national economy performed well, and helped banks reap fat profit, banks regularly made their business public. However, the situation seems to be quite different this year. Though banks still made profit in the first months of the year, their operations were not as prosperous as last year.

The reports released recently by the banks do not contain inflation about pre-tax profit. The reports only emphasise their good liquidity and satisfactory capital mobilisation.

Techcombank announced it obtained satisfactory business results in the first five months of the year. The bank’s total assets by the end of May had reached nearly VND49tril, an increase of VND9tril over the beginning of the year, while its mobilised capital had reached VND42,287bil, up by 21%. Also according to Techcombank’s report, the good capital mobilisation helped the bank maintain high liquidity. However, the bank did not declare the pre-tax profit for the first five months of the year.

The deputy director of a joint stock bank said that it seems that banks are hesitating to declare profit at this moment, both the ones who made profit and the ones who did not.

Explaining this, he said that the banks that made fat profit do not want to reveal their profit at this ‘sensitive moment’, when businesses have to bear very high interest rates. Therefore, the main message banks want to send to the public is that they still are maintaining high liquidity.

People may find it easier to find out information about ACB and Sacombank, the two banks listing on the bourse, since releasing financial reports is a must for listed companies.

Sacombank reaped VND640bil worth of pre-tax profit in the first five months of the year, and the bank expects to obtain VND2tril worth of pre-tax profit this year.

ACB has also reported satisfactory business results for the first five months of the year with VND612bil worth of pre-tax profit. Especially, ACB earned a lot of income from its gold trading floor, which brought about VND1bil a day to the bank.

Eximbank said that though conditions are not favourable, Eximbank still got satisfactory results thanks to its advantages in providing services to import-export companies and trading foreign currencies. The bank hopes to get VND1,200-1,500bil worth of pre-tax profit, nearly double that of last year.

In general, big banks still are maintaining good business results, while small banks are witnessing profit decrease. The representative of a bank in HCM City said that the pre-tax profit of the bank in May decreased by over VND50bil from the previous month.

Banking experts say that the current difficulties may last until the end of the year. However, after that, the banks that have overcome the difficulties will enter a new period of prosperity.

Other Banking News

SBV: Loaning VND at US$ loan interest rates impossible   2008-06-19

HSBC opens new flagship branch in Vietnam   2008-06-19

PM assures on hard currency reserves, dong   2008-06-11

Eximbank boosts capital base by one-third   2008-06-08

HSBC: Stock Prices in Vietnam Now Attractive   2008-06-04

Central bank keeps 12 percent base rate unchanged   2008-06-03

Vietcombank bonds buck sluggish market   2008-06-03

How many banks are enough for Vietnam?   2008-06-02

Proposed ATM fees unwelcome   2008-06-02

Banks cut loans for shares as market drops   2008-06-01

Little impact from ‘technical error’   2008-06-01

Bank warns of looming dong dilemma   2008-05-30

Snafu halts HCMC stock exchange   2008-05-28

Vietnam banks more cautious, HSBC country head says   2008-05-27