Banks achieve half their annual profit targets
Banks achieve half their annual profit targets
Several banks have posted satisfactory profits, achieving around half of the annual targets, during the first half of this year, the Sai Gon Dau Tu (Sai Gon Investment) online reported.
They have achieved the results although the margins between deposits and lending interest rates were narrowing, and the business conditions remained tough.
TPBank announced that it had earned VND263 billion, or US$12.52 million, representing 60 per cent of the annual target. Its deposits and outstanding loans grew 4.5 per cent and 8.8 per cent, respectively, while bad debts declined 0.3 per cent at 1.66 per cent in the period.
Eximbank Chairman Le Hung Dung said the bank has already reached over half of the year's profit target of VND1.8 trillion, or $85.71 million, adding that this figure is achievable if the economy doesn't see fluctuations between now and the end of the year.
He noted that the current context requires greater efforts by the banks as lending activities remain a challenge with the risks of increasing bad debts.
For the first five months, BIDV reported a profit of approximately VND2.5 trillion, or $119.05 million, and Sacombank posted about VND1.3 trillion, or $61.90 million. Both figures were close to half of the banks' quotas for 2014.
Industry insiders said it won't be easy for banks to complete their annual goals because the current margins between deposits and lending rates are only 1 to 2 per cent. Meanwhile, in credit activities, the margins should be 3 per cent or more so that banks can establish provisional funds and obtain profits.
Due to this, it will be hard for banks to avoid adjusting the profit targets in the fourth quarter, like they had done last year, a senior banker said.
Tran Du Lich, a member of the National Advisory Council for Financial and Monetary Policies, said it is unlikely that the general credit situation will see significant improvement in the coming months, and this will challenge banks expecting high profits this year.
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