Q2 banks’ profits stick to the adjusted plan

04-Jul-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

The six-month profits closely followed the plans and banks will speed up operations in the second half of the year to complete the whole year targets if the Covid-19 epidemic does not break out again.

Due to the impact of the disease, at the 2020 annual general meeting (AGM) held on May 23rd, Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) has left the profit target in 2020 open and said that the most important goal is to ensure necessary business effectiveness, in line with the real situation of the economy.

However, VietinBank’s leader also said that the bank will continuously update the developments and impacts of the Covid-19 on the economy and banking activities for shareholders and investors to understand.

The latest information from VietinBank showed that the bank’s pre-tax profit in the first six months of 2020 is estimated to reach six trillion dong, equivalent to t54.5 percent of the year plan (not adjusted). Previously, when the Covid-19 epidemic has not occurred, VietinBank expected a profit growth of at least 10 percent in 2020 compared to the results in 2019, equivalent to nearly 11 trillion dong of pre-tax profit.

Speaking at the AGM on June 26th, leader of Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) said that the bank attained about 11.3 trillion dong of pre-tax profit in the first two quarters of 2020, approximately equivalent to the same period of 2019. However, the bank also left the 2020 profit target open.

It is known that in the first five months of this year, Vietcombank earned 9.1 trillion dong of pre-tax profit. In 2020, the bank aims to expand total assets by approximately seven percent. In which, mobilisation growth target is eight percent and credit growth target is 10%. The bank strives to control bad debt ratio below 1.5%. currently, Vietcombank’s bad debts are controlled around 0.8 percent of the outstanding credit, higher than the 0.77 percent recorded in the end of 2019.

According to Vietcombank’s general director Pham Quang Dung, the amount of outstanding loans that could be affected by Covid-19 pandemic is around 44 trillion dong, in which the total outstanding loans that have been considered for restructuring is 24 trillion dong. Accordingly, Vietcombank estimated to sacrifice 2.240 trillion dong of profit to support customers hit by the Covid-19. Vietcombank’s leader added that from now until the end of the year, the bank will closely monitor the impact of the epidemic to have suitable solutions.

Regarding dividend payment, Vietcombank’s leader said that the bank has not decided the method of dividend payment in 2020 because the specific profit has not been determined yet.

At the meeting, the bank proposed shareholders to approve the Board of directors to carry out the 2020 financial plan under the direction of the State Bank of Vietnam (SBV). At the beginning of the year, Vietcombank expected to distribute shares at eight percent.

For Vietnam Prosperity Commercial Joint Stock Bank (VPBank), the profit target in 2020 is set at a similar number to 2019 (over 10 trillion dong). Closing the first six months of the year, VPBank estimated to attain a pre-tax profit of six trillion dong and expects to exceed the set profit target.

For Asia Commercial Joint Stock Bank (ACB), the bank’s general director Do Minh Toan said that by the end of 2020, ACB can reach at least 50 percent of the year plan, and with the current progress, it is likely that ACB will complete the given profit plan.

In 2020, ACB targets a pre-tax profit of about 7.636 trillion dong. As of May 31st 2020, the bank’s consolidated pre-tax profit was 3.5 trillion dong, in which the profit of the parent bank was 3.450 trillion dong, thanks to the positive growth of bancassurance and card segments.

Expectations for the second half of 2020

Vietcombank’s leader believed that if the credit growth reaches the set plan for the whole year 2020 (10%) in the remaining six months of the year (which means that the credit in the second half of 2020 doubles the first half), the bank’s profit will soar, exceeding one billion US dollars in 2019.

Another reason for Vietcombank to accelerate its profit is the well-controlled bad debts which help increase reversal of provisions.

As of March 31st 2020, among state-owned joint stock banks, only Vietcombank recorded a positive credit growth of more than two percent, and by the end of the first five months, the bank’s credit growth was three percent.

Vietcombank’s leader said that since the bank has shifted to retail lending which helps spread risks, when there is crisis, the risk of bad debts is low. Service activities account for 30 35%.

According to Vietcombank, in the current situation, credit quality will certainly be affected, so the bank has increased risk provisioning to cover bad debts.

Representative of HCM City Development Commercial Joint Stock Bank (HDBank), the bank initially estimated that the Covid-19 pandemic would affect 15 percent of outstanding loans. However, in fact, the number from the beginning of the year is only four percent, so the business results in the whole year is not worrying.

In the first quarter of 2020, HDBank’s outstanding credit grew by nearly six percent and the separate pre-tax profit of the bank in the first half of the year is likely to reach over 2.3 trillion dong, up by 26 percent compared to the same period of 2019.

In 2020, HDBank plans to develop total assets by 33 percent to 305 trillion dong, mobilisation (including mobilisation of customer deposits and valuable papers) by 35%, outstanding loans by 16%, and controls bad debt ratio below two percent. If these targets are completed, HDBank’s pre-tax profit will reach a new record of 5.661 trillion dong, 13 percent higher than 2019.

Sharing more about HDBank’s business strategy, the bank’s vice Chairwoman Nguyen Thi Phuong Thao said that in the five-year plan, the bank aims to obtain Return on Equity (ROE) of 20.02 percent and Return on Assets (ROA) of 1.69 percent per year.

“This plan compared to the whole industry seems to be challenging, but it is feasible for HDBank’s potential. The reason is that in addition to complying with the credit growth assigned by the SBV, HDBank has clearly defined the targeted activities for growth. For example, concerning assets, the bank plans to increase investment in digital conversion bank, fixed assets, etc.,” said HDBank’s.

For Vietnam Technological and Commercial Joint Stock Bank (Techcombank), the pre-tax profit set for this year is 13 trillion dong, up by one percent compared to 2019.

At the recent AGM, Techcombank’s leader said that the bank will continue to focus on ensuring liquidity safety to support customers affected by the epidemic, and ensure the completion of the business plan.

By the end of the first quarter of 2020, Techcombank recorded a pre-tax profit of over 3.1 trillion dong, up by 19 percent over the same period of 2019, operating income of over five trillion dong, up by 39%, and bad debt ratio decreasing to 1.1%.

To achieve these positive results, in addition to the advantage of real estate lending, Techcombank has also diversified its revenue sources by bond issuance, insurance, banking transactions, etc.

For Nam A Commercial Joint Stock Bank (NamABank), Tran Ngoc Tam, general director said that due to the impacts of the Covid-19 pandemic, the bank has to promote restructuring and reschedule debts for customers, the bank’s profit in the first half of the year was not as good as expected, but it will be more positive in the second half of the year.

Therefore, the possibility of fulfilling the profit target set for the whole year 2020 (one trillion dong) is still highly appreciated.

In 2020, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) targets to achieve a pre-tax profit of 2.573 trillion dong, down by 20 percent over 2019. According to the bank’s general director Nguyen Duc Thach Diem, the bank is trying to achieve a profit equivalent to 2019 (3.217 trillion dong of pre-tax profit. Diem said that by the end of May 2020, Sacombank’s pre-tax profit was about 1.303 trillion dong.

 


Category: Finance, Vietnam

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