VN bank profits surge on services, not lending
VN bank profits surge on services, not lending
Some commercial banks have reported high profits in the first nine months of the year thanks to a restructuring effort which focuses on services instead of lending as previously done.
According to financial reports released recently, the Commercial Joint Stock Bank for Foreign Trade of Viet Nam (Vietcombank) posted profit of nearly VND4.5 trillion (US$200.36 million) in the first nine months, up 13.6 per cent year-on-year.
Of the total, services made up $521 billion, up more than 18 per cent. Securities business also represented VND203 billion.
Vietcombank's profit was nearly equal to that of the Commercial Joint Stock Bank for Industry and Trade of Viet Nam (Vietinbank) and the Commercial Joint Stock Bank for Investment and Development of Viet Nam (BIDV), although its total outstanding loans in the period were less than VND440 trillion, equal to only two-thirds of Vietinbank and BIDV's.
Last year, services also accounted for 30 per cent of Vietcombank's profit.
The same trend was seen in Techcombank, which reported profit of VND279 billion from services in Q3 and VND911 billion in nine months.
With the contribution from services, Techcombank posted net profit of more than VND2 trillion in Q3 and more than VND6.2 trillion in nine months, up 29 per cent and 21 per cent year-on-year, respectively.
The financial report from the Asia Commercial Bank (ACB) also showed that the bank posted profit of VND236 billion from services in Q3, helping the bank make total profit of VND415 billion in the period, up 15.5 per cent year-on-year.
ACB general director Do Minh Toan said his bank is boosting services with a focus on financial services and individual customers.
According to independent expert Dinh The Hien, while lending has shown signs of risk due to a rise in non-performing loans, increasing revenue from boosting services would help banks achieve healthy and sustained development in the future.
