Many banks have reportedly gained high profit last year, helped by strong credit growth and initial gains in the settlement of bad debt.

BIDV was the latest to release a huge pre-tax profit of VND8.8 trillion (US$387.6 million) in 2017, the bank’s highest so far, which has exceeded its plan.

The bank also met all the targets set for 2017, with the total assets, mobilised capital and outstanding loans hitting over VND1.1 quadrillion each.

Accordingly, BIDV’s total assets rose 16.7 per cent, against the previous year, to VND1.176 quadrillion, helping the bank maintain the top position, in term of assets among Viet Nam’s banking system.

With a total mobilised capital of VND1.106 quadrillion, up 17.9 per cent against 2016, BIDV’s mobilised capital made up 12.5 per cent of the entire banking system’s total mobilised capital.

The bank’s outstanding loans last year surged 18 per cent against 2016 to VND1.136 quadrillion, accounting for 13.12 per cent of the entire banking system’s total loans.

Previously, Vietcombank also reported a pre-tax profit of more than VND10.8 trillion, a year-on-year increase of 32 per cent. This was the first time the local banking system has seen a bank with pre-tax profit exceeding VND10 trillion.

Vietcombank’s profit, with its service segment making up 24 per cent, against 20 per cent in 2015-16, is expected to be the highest in the entire banking system.

As of December 31, 2017, Vietcombank’s total assets also reached VND1.05 quadrillion, making it the fourth bank in Viet Nam possessing total assets exceeding VND1 quadrillion.

Together with State-owned commercial banks, many other joint stock commercial banks have so far also reported to surpass the targets for 2017.

Vice chairwoman of HD Bank Nguyen Thi Phuong Thao said that the bank’s pre-tax profit in 2017 reached VND2.42 trillion, 2.1 times higher than 2016. By the end of 2017, the bank’s total assets was worth VND191 trillion, the total mobilised capital was VND168.8 trillion and the outstanding loans reached VND111.9 trillion.

The same trend has also been seen in many other banks, such as Sacombank, OCB, TPBank, LienVietPostBank and VIB.

LienVietPostBank’s pre-tax profit from January 2017 to November 2017 reached more than VND1.7 trillion, 10 per cent higher than the full-year plan. As of the end of November, the bank’s charter capital and total assets rose to VND6.46 trillion and VND154 trillion, respectively.

Nguyen Dinh Tung, general director of OCB, said the bank reported VND960 billion in January to November 2017 pre-tax profit, double than that achieved at the end of 2016. Its total profit last year was estimated at more than VND1 trillion, above the target of VND780 billion.

Sacombank also met its profit target earlier than expected. From January to September, its pre-tax profit amounted to more than VND1 trillion, double its target and five times higher than in the same period of 2016.

The profit growth of banks was helped by strong credit growth, the better-than-hoped settlement of bad debt, effective risk management and the growing real estate market.

Dr Bui Quang Tin from the Banking University of HCM City said credit grew by some 19 per cent last year, while liquidity remained stable, and the inter-bank offered rate was kept low. Non-performing loans were curbed at below 3 per cent in the banking system.

A report from the National Financial Supervisory Committee (NFSC) also estimated that the pre-tax profits of the banking sector in 2017 would rise by more than 40 per cent over the previous year, while after-tax profits would surge by 44.5 per cent.

Truong Van Phuoc, NFSC’s acting chairman, said this was thanks to the handling of bad debt, hastened by the National Assembly’s Resolution 42/2014. Some VND70 trillion worth non-performing loans were handled in 2017, up 40 per cent against 2016. — VNS