Big banks report profit decrease, small fail to pay promised dividends
26-11-2012 21:17:43+07:00
Big banks report profit decrease, small fail to pay promised dividends
Commercial banks all keep pessimistic about the business result this year, when the credit flow gets stuck and the bad debts increase rapidly.
Trinh Van Tuan, President of OCB, said the target profit of 500 billion dong may be unattainable this year.
Tuan said the credit growth rate of the bank in the first 10 months of the year was 15 percent only, or just a half of the quota allocated to the bank. Meanwhile, the bad debt increases have forced OCB to make high provisions against the bad debts, thus leading to the profit decreases.Tuan also said that though the bank’s profit in the last 10 months was “satisfactory”, OCB may still not be able to fulfill the business plan because of the high provisions.
Earlier this year, OCB planned to pay the dividend of 10 percent to shareholders, but it is very likely that the bank can pay five percent only.
The finance reports by joint stock banks all showed the sharp falls in the profits in the first three quarters of the year. Kien Long Bank has lowered the pretax profit target by 14.5 percent. It has also slashed the targets in total assets, mobilized capital, dividends, while having raised the bad debt ratio target.
The bank’s targeted pretax profit has been lowered by 14.5 percent to 530 billon dong, while the bad debt ratio has been raised from two percent to 3 percent. The latest proposed dividend is 10 percent instead of 12 percent as previously planned.
The Q3 finance report of Kien Long showed that it got 151.29 billion dong in pretax profit in the third quarter, 413.9 billion dong in the first nine months of the year, a decrease of seven percent in comparison with the same period of the last year. By September 30, 2012, the bad debt ratio has increased to 2.78 percent from 2.77 percent late last year.
Dai A Bank’s outstanding loans by the end of September 2012 had increased by 11.6 percent, while the mobilized capital increased by 15.8 percent. However, its Q3 profit was just equal to 50 percent of that in the same period of the last year (61 billion dong).
As such the nine-month pretax profit was 21 percent lower, about 225.4 billion dong.
This has been attributed to the higher operation costs and the lower net interests from bank loans. Meanwhile, the bank’s provision has increased from 68.7 billion dong to 120.4 billion dong.
Big banks have also reported unsatisfactory business results. Vietcombank, for example, got 4394 billion dong in nine-month pretax profit, down by five percent from the same period of the last year.
The bank has provisioned 2575 billion dong against risky loans, up by 50 percent if compared with the same period of the last year.
Eximbank has also reported the profit decreases due to the same reasons. The nine month outstanding loans had decreased sharply by 14.6 percent, while the operation cost had increased by 29 percent. Besides, ineffective securities trading and gold trading have also forced the bank’s profits down.
According to Nguyen Hoang Minh, Deputy Director of the HCM City branch of the State Bank of Vietnam, the profit gained by the local banks is just equal to 28.5 percent of the same period of the last year.
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