With just over two and a half months to go before the end of the year, many joint stock commercial banks announced they have already reached their full-year targets. It is forecasted that 2005 will be a very successful year for joint stock commercial banks.
Habubank is the first bank that has completed its 2005 plan after consolidation figures for the third quarter. Following is VPBank with most targets exceeded.
Some joint stock commercial banks such as Military Bank, VIBank, Techcombank and others are running closer to their targets at about 90% for the full year.
The notable point in results of the joint stock commercial banks bloc is the raised deposit and profit growth speed is quite impressive.
Bui Thi Mai, general director of Habubank said Habubank’s pre-tax profit is 28.9% over the full-year target with gross profit of 114 billion dong. Total deposits of the bank increased 28.65% compared to the end of the second quarter and up 64.22% over early 2005. The bank’s total outstanding loans increased 29.4% against the end of 2004. Habubank’s non-performing loan ratio was still less than 1%.
Le Dac Son, general director of VPBank said that VPBank has basically completed its main targets. By the end of September, total deposits of VPBank have increased over 60% against early this year and are expected to increase 90% by the end of this year. The bank expected to post 85-90 billion dong in pre-tax profit, up 30% compared to early this year.
This bank also is making plans to pay dividends for shareholders. As anticipated, in this fourth quarter, VPBank will pay the remaining dividend of the year 2005 at over 5%, bringing the dividend rate of the full year 2005 to over 20%. The NPL ratio of VPBank is maintained at 0.86%, the bank said.
With regard to Military Bank, in the three quarters, MB earned 114 billion dong of net profit, reaching 95% of its full year target, its total outstanding loans are estimated at 4.6 trillion dong winning 100% of the target.
Apart from the above figures, 2005 is also the prominent year of the joint stock commercial banks bloc in plans to raise chartered capital. By the start of the fourth quarter this year, the chartered capital of this bloc has increased average 33%, of which the group of banks that obtain the chartered capital of 500 billion dong or more, including Sacombank with 1.125 trillion dong, ACB 940 billion dong and Eximbank 500 billion dong.
Notably, Techcombank made three upward adjustments on its chartered capital for two recent months to 503 billion dong. VIBank also is planning to raise its capital to 500 billion dong by late this year, followed by MB, VPBank and some others with the chartered capital of around 300-400 billion dong.
“That is the impressive figure of joint stock banks and it is likely this year will be the most successful year to date for joint stock banks. It is obvious that the operation of joint stock commercial banks has become more flexible and effective,” said Son.
Also, according to the State Bank of Vietnam, joint stock commercial banks’ raising chartered capital is a crucial condition to modernise technologies and diversify services and increase the capital adequacy ratio in banking operations.
Son added that the reason why joint stock commercial banks have reached most targets such as pre-tax profit, deposits, outstanding loans and others is thanks to their competitive advantages, including attractive deposit interest rates and improved product and service quality.
Trinh Thanh Binh, vice general director of VIBank said that the attractive rate together with flexible products and services for customers was currently an advantage of joint stock commercial banks.
“This is not only a requirement for the development of joint stock commercial banks but also a competitive pressure. In the near future, when Vietnam enters the WTO, the presence of foreign banks, which have the competitive edge in modern technologies, surely will be a big challenge for domestic banks. Therefore, boosting the investment in technologies and development of services is an urgent requirement for domestic banks to be able to integrate internationally,” said Binh.
Also, in regard to the country’s integration process, directors of some joint stock commercial banks said the leading advantage of domestic banks is the wide branch network. This is the reason for joint stock commercial banks to open a series of branches and transaction offices countrywide in 2005. Currently, the branch system of joint stock commercial banks is expanded to most parts of the country, and each joint stock bank has an average of 20-30 branches.