Credit growth lifts bank profits

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Credit growth lifts bank profits

Vietnam News - 8/11/2015 5:00:00 PM

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High credit growth has helped many commercial banks to gain impressive profits this year despite having to provide a larger amount for provisional fund.

By July 20, credit growth of banks was estimated to rise by 7.32 per cent against late last year, with Ha Noi registering a 12.4 per cent increase.

The credit growth has contributed significantly to the banks' profits, which mainly come from lending.

Vietcombank had, by the end of June, gained a pre-tax profit of more than VND3 trillion (US$138.24 million), up 7 per cent against the same period last year. The result helped the bank meet 51.5 per cent of its yearly target.

Vietcombank's provision during the period was VND2.994 trillion ($137.97 million) and its non-performing loans stood at 2.4 per cent.

Though also having to raise fund for the provision, VietinBank's pre-tax profit reached nearly VND3.9 trillion ($179.72 million).

BIDV also gained a positive pre-tax profit of VND3.016 trillion ($138.98 million), up 25 per cent year-on-year.

According to plans, the three big-sized banks were expected to gain impressive pre-tax profits with VND7.5 trillion ($345.62 million) of BIDV, VND7.3 trillion ($336.4 million) of VietinBank and VND5.9 trillion ($271.88 million) of Vietcombank.

Besides the large banks, smaller sized ones also reported high profits.

With VND342 billion ($15.76 million) in the first half, Tien Phong Bank met 55 per cent of its annual profit target.

Eximbank also met a half of its VND1 trillion ($46 million) profit target set for this year.

Many banks, which have been allowed to raise the credit growth ceiling this year recently by the central bank, also expected to gain higher profits in the second half of the year.

As the country's credit growth has so far risen sharply against the same period last year, central bank Governor, Nguyen Van Binh, said the central bank could lift the credit growth target this year to 17 per cent from 13-15 per cent set earlier this year to boost economic growth.

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