Many banks leave profit targets open in 2020

02-Jun-2020 Intellasia | Dau tu Online | 6:02 AM Print This Post

Facing difficulties caused by the Covid-19 pandemic, many banks have cautiously set lower profit targets in 2020 compared to 2019, and many banks have left profit targets open.

In such context, Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) continued to set a reasonable credit growth target in 2020, and promote debt restructuring to support customers affected by the pandemic.

As for the profit target, at VietinBank’s 2020 Annual general Meeting (AGM) held on May 23rd, the bank only mentioned that its separate and consolidated profit targets in 2020 are set to ensure necessary business efficiency and improve business operations in line with the actual situation of the economy, continuously updating the developments and impacts of the Covid-19 pandemic on the economy and banking operations, in accordance with the approval of the competent authorities.

Chair of the Board of directors (BOD) of VietinBank Le Duc Tho said that, the bank is balancing the profit targets in 2020 due to many factors. Before the Covid-19 outbreak, the bank aimed at a profit growth of 10 percent or more compared to 2019 (nearly 11 trillion dong of before-tax profit).

However, according to VietinBank’s Chair of BOD, the bank’s profit developments are following the plan and its pre-tax profit is expected to reach about six trillion dong by the end of the second quarter (Q2) 2020. In Q1 2020, VietinBank recorded an after-tax profit of 2.404 trillion dong, down by five percent compared to the same period of 2019.

On May 29th, Saigon Commercial Joint Stock Bank (SCB) carried out its 2020 AGM to approve the business targets. In 2020, SCB plans to raise total assets by 12.19 percent to 637.166 trillion dong, lending to customers by 13 percent to 377.283 trillion dong, and mobilisation from market 1 by 13.3 percent to 553.092 trillion dong.

SCB has also left the profit target open, for the reason that the bank is in a restructuring process, so all resources must focus on the second phase of the restructuring process. The achieved profit must be set aside for provisions for bad debts. SCB currently holds more than 20,000 special bonds of Vietnam Asset Management Company (VAMC) and has made a provisions for risks of over 10 trillion dong of these bonds.

Meanwhile, Nam A Commercial Joint Stock Bank (NamABank) set a 2020 pre-tax profit target of 800 billion dong, down by 100 billion dong compared to the previous year. The bank’s BOD has collected shareholders’ opinions on conducting an AGM via online channel after it was postponed on March 23rd.

Asia Commercial Joint Stock Bank and Tien Phong Commercial Joint Stock Bank (TPBank) are also cautious with their profit targets in 2020 in the context when the Covid-19 pandemic has affected the production and business activities of enterprises.

On June 16th, ACB will hold its 2020 AGM to approve the 2020 business plan with submitted profit target of 7.636 trillion dong, down by more than 12 percent compared to the expected number mentioned at the meeting with investors in January 2020, when the Covid-19 pandemic did not occur in Vietnam (8.7 trillion dong of pre-tax profit).

The pre-tax profit target submitted by TPBank’s BOD at the AGM held of May 27th 2020 is 4.068 trillion dong, up by five percent compared to 2019. In Q1 2020, TPBank collected over 1.1 trillion dong of pre-tax profit.

In 2020, Southeast Asia Commercial Joint Stock Bank targets a pre-tax profit growth of over eight percent, reaching 1.506 trillion dong.

The Covid-19 broke out and reached the peak from March 2020 on a global scale. It has hit the plans of businesses and people. Thus, the plans in 2020 of banks can hardly be maintained as expected earlier this year.

At the same time, banks also have to restructure and reschedule debts for customers affected by the pandemic, cautiously grant new loans in order to control bad debt risks and avoid the rise of provisions for risks which may erode profits.


Category: Finance, Vietnam

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