Income from services of most of Viet Nam’s commercial banks surged sharply by an average of 35 per cent annually in the past three years.

According to financial reports of 20 banks, some of them posted annual high growth during the 2015-17 period, such as SHB (up 184 per cent) and Kienlongbank (up 125 per cent). The rates for BacABank, TPBank and MBBank were also high at 70-90 per cent.

The surge last year alone of the banks reached up to 48 per cent against the previous year to help their income from services touch a total value of VND35 trillion (US$1.54 billion), of which, nine banks posted a profit of more than VND1 trillion each.

The achievements were a result of considerable investment by the banks to improve the quality of their retail banking services to enhance competitiveness in the market. They also focused on other aspects such as marketing, technology and human resources to attract more individual customers to non-credit services.

This year, banks continuously expected the revenue from fees and retail banking services to become their main sources of income as a result of rising market demands.

According to Nguyen Duc Vinh, general director of VP Bank, after years of investing in the financial company FE Credit, his bank is expecting a huge profit in 2018.

Vietcombank also expects to better exploit the potential retail banking segment this year. The bank last year recruited Thomas William Tobin, a senior Canadian expert in retail banking, to be its retail banking director. This is the first time the State-owned bank has appointed a foreigner in its management board, showing its priority for the retail banking segment.

Vietcombank’s chairman Nghiem Xuan Thanh hopes that Tobin, who has expertise in global and Vietnamese finance, will help the bank make a leap in the retail banking segment. Vietcombank is targeting to become the country’s leading bank in the retail segment in 2020, Thanh said.

Nguyen Dinh Tung, general director of Orient Commercial Joint Stock Bank, said his bank expected to earn a pre-tax profit of more than VND1 trillion in 2018, thanks to specific strategies in the sales of financial products, especially in non-credit services.

According to experts, with more than 93 million people and increasing consumption, Viet Nam is considered a hot destination for retail banking, which is why banks have strategically planned to boost the service segment. — VNS