A Vietcombank office in Ha Noi. The bank plans to reach nearly $262 million in pre-tax profits this year. — Photo vietbao.vn

HA NOI (Biz Hub) ― Vietcombank (VCB) will pay the dividend for last year at a rate of 12 per cent in shares, instead of a cash payment as in previous years.

This was reported by news website ndh.vn, citing analytical sources in Vietcombank Securities (VCBS).

This year, the bank aims to reach a pre-tax profit of VND5.5 trillion, or US$261.90 million, down 3.5 per cent from last year. This is based on a growth target in 2013 for both deposits and outstanding loans of about 13 per cent.

By the end of February, deposits remained unchanged, while lending declined to 1 per cent at the bank, following the general trend across the banking sector.

VCBS analysts said the results were a normal seasonal development and anticipated Vietcombank's lending activities would grow significantly from the second quarter. The bank is expected to implement large business financing contracts, besides expanding the retail market share during this period.

The prospects for profits are bright as the bank's net interest margin – a measure calculated as a percentage of interest bearing assets – is likely to remain stable throughout the year at the current level of 2.6 per cent.

Vietcombank will continue to control bad debts at less than 3 per cent of total outstanding loans, while maintaining a cautious risk management policy. The ratio of risk provisional funds over bad debts is expected to reach 90 per cent in 2014.

On average, nearly 900,000 VCB shares have changed hands per day over the past month, with an average daily trading value of VND26.7 billion, or $1.27 million. Tuesday's shares closed 0.3 points higher at VND31,100, or $1.48 per share on the HCM City Stock Exchange. ― VNS