A number of commercial banks in HCM City have declared hefty profits so far this year with Vietcombank’s southern branch leading the way. The branch racked up a pre–tax profit of 430 billion dong during the first 11 months of this year, a 71% increase on by 2003 period.
It is chasing a profit of 450 billion dong for the whole year, compared to 335 billion dong by 2003, said the southern branch director Nguyen Phuoc Thanh.
The southern branch’ earnings usually account for one–third of Vietcombank’s overall profit.
Sixteen commercial joint stock banks in the city also reported profits, with a strong 40% growth rate during the year to date, said a State Bank southern city branch spokesperson.
The Asia Commercial Bank (ACB) recorded its highest profits to date with 210 billion dong and is looking to earn at least 240 billion dong for the whole year. The figure in 2003 was 185.5 billion dong.
The Saigon Thuong Tin (Sacombank), Vietnam’s biggest joint–stock commercial bank in terms of capital, reeled in 200 billion dong and is hoping to reach 220 billion dong by the end of the year, against 127 billion dong in the whole of 2003.
Other profitable institutions include the Vietnam Export–Import Commercial Bank (Eximbank) with 96 billion dong, the Eastern Asia Commercial Bank (EAB) with 80 billion dong and the Phuong Nam Commercial Bank (PNB) with 75 billion dong.
Joint venture banks also reported profits, with Indovina Bank returning a profit of US$4.45 million over the first 11 months of the year. The bank is looking to earn more than US$5 million by the end of 2004, a 50% increase from by 2003, said the bank’s first deputy general director Ph an Dao Vu.
Indovina Bank, a 50–50 venture between the Industrial and Commercial Bank of Vietnam (Incombank) and Taiwan’s United World Chinese Commercial Bank, has just increased its chartered capital by US$5 million to US$25 million and now boasts the highest capital of any joint venture bank in Vietnam. The capital increase enables Indovina Bank to expand its loans and network, said Vu.
“Banks legally cannot lend more than 15% of their registered capital to a single client. The recapitalisation will allow us to loan more money to any single customer,” Vu said. The HCM City–based bank has branches in Can Tho, Binh Duong, Hanoi and Hai Phong and plans to open another branch in Dong Nai, where many Taiwanese companies operate.
The VinaSiam Bank, a joint venture between the Bank for Agriculture and Rural Development of Vietnam (Agribank), Thai CP Group and Siam Commercial Bank, saw a 10% increase year-on-year in its profits, said a bank executive who declined to give exact figures.
By 2003, VinaSiam earned a pre-tax profit of more than US$1 million and has now received the central bank’s approval to raise its registered capital to US$20 million from the current US$15 million.
Vietnam Investment Review has learnt that foreign financial institutions, mainly investment funds and foreign bank branches, have shown keen interest in buying into local profit-making joint stock commercial banks.
Hong Kong and Shanghai Banking Corp (HSBC) and ANZ Bank are competing to buy a 10% stake in Sacombank. Germany’s Deutsche Bank is pursuing Eximbank shares while Tomasek, a giant Singapore–based financial investment institution, is seeking to buy into ACB.
In addition, investment funds such as Phanxipang (PXP), Vietnam Opportunities Fund (VOF) and Vietnam Enterprise Investment Limited (VEIL) are also considering buying a stake in profitable local banks.