Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) reported a pre-tax profit of more than VND11 trillion (US$482.5 million) in 2017.

This was a record pre-tax profit achieved by a Vietnamese bank, representing a rise of 32.9 per cent during the same period in the previous year and 16 per cent higher than Vietcombank’s target.

Reporting at the bank’s 2018 business conference on Friday, general director Pham Quang Dung said the results in 2017 were impressive and far exceeded targets.

Total deposits last year amounted to VND889.7 trillion, up by 38.7 per cent year on year and 18 per cent above set target.

Vietcombank’s outstanding loans reached VND553 trillion, an increase of 17.2 per cent.

Credit quality was under control, with the ratio of non-performing loans at 1.11 per cent, a drop of 0.35 percentage points over the end of 2016.

The bank allocated more than VND6.18 trillion for provisioning last year.

Its trading of foreign currencies was worth $45.1 billion, rising by 27.2 per cent, while transfer of remittances was worth $1.9 billion, up by 14.9 per cent.

Speaking at the conference, Vietcombank Chairman Nghiem Xuan Thanh said the bank’s project to restructure and resolve bad debts by 2020 was approved by the State Bank of Viet Nam earlier this week, targeted to develop Vietcombank into the leading bank in risk management in Viet Nam, as well as to join the top 100 largest banks in Asia, and become one of the world’s top 300 financial corporations.

The central bank also allowed Vietcombank to offer shares to foreign investors in a private placement which, Thanh said, if successfully implemented in the first months of 2018 would be a positive sign.

Thanh added that last week Prime Minister Nguyen Xuan Phuc gave a greenlight to Vietcombank’s plan of opening a subsidiary in Laos.

On January 8, Vietcombank announced that it would complete the development of the probability of default (PD) model in accordance with Basel 2.

With the PD model, Vietcombank was getting ready to apply Basel 2, following an advanced internal ratings-based approach.

Vietcombank was the largest among listed banks by capitalisation, with its share traded at VND58,800 each on Friday morning and a market capitalisation of nearly $10 billion.

Record foreign exchange reserve

Central bank Governor Le Minh Hung said at the conference Viet Nam’s foreign exchange reserve reached a record high of $54.5 billion as of Friday.

This would help consolidate business confidence and attract foreign investors, Hung said.

In the first ten days of 2018, the foreign exchange reserve rose by $1.5 billion.

Since early 2016, when a fixed exchange rate regime was applicable, the central bank bought a net value of $22 billion.— VNS