Commercial banks will hold annual general meetings of shareholders (AGM) next quarter to map out production and business plans for 2023.

Documents prepared for the upcoming AGMs show some banks are cautious about profit targets set for this year.

Nam A Bank set a target of consolidated pre-tax profit of VND2.4 trillion this year, an increase of only 5-6 per cent compared to last year. In 2022, the bank recorded a pre-tax profit of nearly VND2.27 trillion, up 26.1 per cent over the previous year, close to the bank’s set target of VND2.25 trillion.

Nam A Bank said the expected profit in 2023 is calculated on the basis of the bank’s credit growth target and in accordance with the regulations of the State Bank of Vietnam (SBV) to ensure safety ratios in line with current legal regulations and stable macro-economic conditions.

Documents for the 2023 AGM of VIB also showed the bank is quite cautious when setting profit targets this year.

Specifically, VIB expects pre-tax profit in 2023 to reach VND12.2 trillion, up 15.3 per cent compared to 2022. Although 2023’s profit is expected to still increase by double-digit figure, the growth rate decreases by half compared to last year's profit plan. Last year, VIB set a target to increase profit by 31 per cent compared to 2021.

However, VIB still targets a number of other key business indicators to grow more positively this year. For example, VIB targets total assets and total outstanding loans to increase by 25 per cent.

Earlier, Vietcombank’s leaders said the bank aims to increase its 2023 pre-tax profit by at least 12 per cent compared to 2022. In 2022, Vietcombank recorded a 39 per cent increase in pre-tax profit, up 19 per cent against the yearly set target.

Eximbank late last year announced its business plan for 2023 with a pre-tax profit target of VND5 trillion, up 35 per cent compared to last year’s figure of VND3.7 trillion.

An SBV Q1 2023 business performance survey also showed commercial banks were more cautious when forecasting.

According to the survey, only more than half of banks expect their business performance to improve in 2023, but the improvement is lower compared to 2022.

Experts also forecast the banking industry will continue to face difficulties in 2023 in the context of the real estate market downtrend and the less positive import and export outlook.

Under a recent report, Viet Dragon Securities Company (VDSC)’s analysts said the interest income growth of the banking industry in 2023 will slow due to the impact of a decreasing net interest margin (NIM).

The NIM decline will differ among banks in 2023, which will cause the growth of interest income of the entire banking industry to stay at less than 11 per cent. — VNS