LienVietPostBank has decided to lower its main business targets for the year as it attempts to expand its network and focus on technology and sustainable development.

The bank has reduced its pre-tax profit target from VND1.8 trillion (US$77.4 million) to VND1.2 trillion ($51.5 million), and total assets from VND190 trillion to VND180 trillion. The target for mobilised capital has also been lowered from VND170 trillion to VND160 trillion while total outstanding loans has been cut from VND123.5 trillion to VND117.5 trillion. The minimum dividend payout ratio will be lowered from 12 per cent to 10 per cent.

Other basic business targets in 2018 remain unchanged such as increasing chartered capital to VND9.8 trillion and holding bad debt rate of less than 1.5 per cent.

Explaining the reason for the move, Chairman Nguyen Dinh Thang said the bank’s initial targets for this year had been based on high credit growth and positive results in 2017.

However, the State Bank of Viet Nam (SBV) has instructed commercial banks to control credit growth in line with their capital mobilisation ability and credit growth limits. Accordingly, LienVietPostBank was assigned a credit growth quota of 14 per cent this year, forcing the bank to lower its targets.

In addition, LienVietPostBank’s mobilised capital in the first half of the year was high at 17 per cent.

“On the positive side, LienVietPostBank’s medium and long-term capital is more stable. However, in the short term, the increase in interest payment is also a reason to reduce the bank’s profit in the current period,” Thang said.

He said the most important reason for the lower profit targets was because the bank wanted to focus its investment on modern infrastructure network to become one of the leading retail banks serving the whole country.

In the first half of the year, LienVietPostBank opened 95 transaction offices and two branches, and employed 1,500 people, equivalent to half of the total in the previous nine years. — VNS