Vietcombank (VCB) reports near US$1 billion in 2019 profit

Total profit in 2019 increased by 26 per cent year on year to VND23.15 trillion (nearly US$1 billion), the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) announced on Friday.

 

The latest figure has helped the bank achieve the $1 billion profit target one year ahead of schedule.

The profit made in 2019 increased by 250 per cent from the figure recorded in 2015, when the bank started its restructuring plan.

In 2019, the return-on-assets (ROA) and return-on-equity (ROE) ratios were 1.59 per cent and 25.51 per cent, increased from 2018 rates of 1.39 per cent and 25.42 per cent, respectively.

The bank’s chairman Nghiem Xuan Thanh attributed the bank’s big profit jump to good performances in all fields.

Despite the lowest saving rates in the sector, the bank’s total mobilised capital was up 14.1 per cent on-year to VND1 quadrillion.

The figure included capital raised from tier-1 capital market (individuals and economic institutions), which rose 15.4 per cent on-year to VND950 trillion.

Of the total capital mobilisation, termless savings accounted for 27.6 per cent.

The bank also recorded a 15.9 per cent growth of total lending – the highest among large-cap banks – with more than half (51.8 per cent) of the money loaned to retail customers. Retail lending also grew by 32.3 per cent in 2019 while wholesale banking was up only 2.3 per cent.

The services division continued performing positively such as international payment, trade payment, foreign currency trading, e-banking and remittance.

At the end of 2019, the bank recorded a bad debt ratio of 0.77 per cent, down from 0.97 per cent at the beginning of the year.

In 2020, Vietcombank eyed growth rates of 12-14 per cent in total assets, total mobilised capital and total lending. It forecast pre-tax profit in 2020 would rise 15 per cent on-year to VND26.5 trillion.

The bank’s general director Pham Quang Dung suggested the State Bank of Vietnam (SBV) approve Vietcombank’s capital hike plan following the Government’s agreement for the bank to use its profit to increase capital.

He also proposed the SBV grant a credit growth of more than 14 per cent – the average of the banking sector – for Vietcombank so that the bank can explore its full potential.

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