Banks set ambitious profit targets in 2021 despite COVID-19

Banks set ambitious profit targets in 2021 despite COVID-19

Many banks have set high profit targets for the new year despite COVID-19 complexities.

Banks expect the recent resurgence of COVID-19 to soon be contained to push up credit activities

Nghiem Xuan Thanh, chairman of Vietcombank – a top performer in Vietnam’s banking sector – said that the bank has set forth a pre-tax profit target of VND25.2 trillion ($1.1 billion), signifying a 12 per cent jump compared to 2020.

The bank also aims to achieve a 6 per cent hike in its total asset value, an 8 per cent jump in total deposit value from the community and businesses, and 12 per cent credit expansion this year, while controlling its non-performing loan (NPL) ratio below 1 per cent.

This year, Military Bank (MB) has set forth fairly challenging business targets, with a 25-30 per cent jump in its pre-tax profit target to surpass VND14.6 trillion ($634.8 million).

Similarly, its total asset value is expected to grow 15 per cent to VND545 trillion ($23.7 billion), ensuring the performance of the credit expansion target assigned by the central bank, while keeping the consolidated NPL ratio below 1.3 per cent.

In case of VietinBank – one of the four leading state-owned lenders – this year the bank will target a 10-20 per cent jump in its profit target, along with a 3-6 per cent hike in total asset value, with credit sources expanding by 8-11 per cent and deposit volume growing at 10-12 per cent, while NPL ratio will be kept below 2 per cent.

Meanwhile, CEO Le Viet Hai at Ho Chi Minh City-based commercial lender ABBank said that 2021 is the first year of the bank's mid-term business plan to 2025 with the target of carving out a spot among the most efficient privately-held banks in the country.

Last year, ABBank posted VND1.368 trillion ($59.5 million) of pre-tax profit, equal to 101 per cent of the full-year projection and up 11.3 per cent on-year, despite the impact of COVID-19.

Do Minh Toan, CEO of ACB – another privately-held lender in Ho Chi Minh City – revealed that the bank's targets this year are higher or at least equal to those in 2020 and these targets could be officially deployed after getting approval at the bank’s annual shareholders' meeting in April.

Last year, ACB saw 27.7 per cent jump in its pre-tax profit to touch VND9.596 trillion ($417.2 million). The bank’s diverse business segments witnessed spectacular growth such as earnings from forex trading soaring 60 per cent to VND687 billion ($29.87 million).

VNDirect Securities JSC forecast an increase in the banks’ profit target this year. The banking sector is the main channel used by the government to propel economic growth.

VNDirect expects that the speed of public investment disbursement is kept at a high level and the central bank maintains loosening monetary policy this year to push up economic rebound and credit growth.

Economic and financial analysts, however, supposed the NPL volume would go up remarkably along with a rising number of firms subject to debt rescheduling according to the State Bank of Vietnam's Circular No.01/2020/TT-NHNN. This forced banks to scale up provisioning late last year.

VIR