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Banking & Finance

Vietcombank sees handsome growth in 1H

Released at: 10:18, 11/07/2017

Vietcombank sees handsome growth in 1H

Illustrative image (Source: vietcombank)

All indicators at impressive levels for first half of 2017.

by Duy Anh

Vietcombank, Vietnam’s largest lender by market value, posted more than VND5.05 trillion ($222 million) in pre-tax profit during the first half of this year, up 20.5 per cent year-on-year and equivalent to 53.2 per cent of the annual plan, CEO Mr. Pham Quang Dung told a meeting on July 7-8 to review the bank’s performance.

All activities saw positive growth, with return on equity (ROE) and return on assets (ROA) touching 16.43 per cent and 0.99 per cent, respectively, while the net interest margin (NIM) was 2.69 per cent, mainly due to a surge in personal loans.

By June 30, Vietcombank’s total outstanding loans had increased by 13.1 per cent year-on-year, equivalent to 95.7 per cent of the annual plan. Corporate loans rose 8.9 per cent, loans to small and medium-sized enterprises (SMEs) 13.9 per cent, and loans to local economic entities and individuals 24.2 per cent.

The bank saw medium and long-term lending account for 43.9 per cent of total loans to customers as at June 30. Notably, loans to foreign direct investment (FDI) enterprises rose 32.1 per cent year-on-year to VND41.3 trillion ($1.81 billion), equivalent to 94.4 per cent of the annual plan.

As at the end of the second quarter, Vietcombank’s non-performing loans (NPLs) stood at VND7.88 trillion ($346.4 million), for an NPL ratio of 1.47 per cent, slightly below the 1.48 per cent as at the end of the first quarter and 1.51 per cent as at the end of 2016. It set aside VND3 trillion ($132 million) for credit provisions during the first half.

At the meeting, Chairman of Vietcombank’s Board of Directors Mr. Nghiem Xuan Thanh also made proposals to the State Bank of Vietnam (SBV) regarding an increase to Vietcombank’s charter capital, the development of the bank’s network, including the opening of a subsidiary in Laos, and expanding its credit growth limit to 16 per cent this year.

For his part, SBV Deputy Governor Mr. Nguyen Dong Tien said he hopes Vietcombank’s achievements at the end of 2017 will be the best in the banking sector.

Earlier, Vietcombank shareholders approved the bank’s 2017 business targets, including increasing pre-tax profit by 8 per cent year-on-year to VND9.2 trillion ($404.4 million) and total assets by 11 per cent to VND874.6 trillion ($38.45 billion). The dividend rate is to remain at 8 per cent.

The bank aims to expand its outstanding credit by 15 per cent year-on-year to VND547.1 trillion ($24.05 billion) and total market value by 14 per cent to VND684.8 trillion ($30.1 billion), and keep its NPL ratio below 2 per cent.

In the first quarter of this year, the bank reported pre-tax profit of nearly VND2.65 trillion ($116.5 million), up 15 per cent year-on-year. Last year, it earned pre-tax profit of over VND8.5 trillion ($373.7 million), up 25 per cent against 2015.

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