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Vietinbank recorded $378m pre-tax profit in 2016

Released at: 11:33, 02/02/2017

Vietinbank recorded $378m pre-tax profit in 2016

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It continues to be one of the leading banks in State budget contribution.

by Duy Anh

Vietinbank posted a 2016 pre-tax profit of VND8.53 trillion ($378 million) and an after-tax profit of VND6.825 trillion ($302.4 million) according to the bank’s consolidated financial statement for 2016’s fourth quarter.

As of December 31, 2016, Vietinbank’s total assets stand at VND948.7 trillion ($42 billion), up 22 per cent year-on-year and have a charter capital of VND37.2 trillion ($1.65 billion). During the fourth quarter, customer deposits reached VND654.4 trillion ($29 billion) while customer lending stood at VND662 trillion ($29.3 billion).

During the September-December period, the bank’s after-tax profits reached VND1.63 trillion ($72.2 million), up 30 per cent year-on-year while pre-tax profit stood at VND2.045 trillion ($90.6 million), up 26 per cent year-on-year thanks to significant improvements in some of the bank’s activities.

Net revenue from foreign currencies trading during the fourth quarter was VND210 billion ($9.3 million), up VND286 billion ($12.7 million) 378 per cent year-on-year. Net revenue from capital contribution, equity investments was recorded at VND91 billion ($4 million), up VND103 billion ($4.6 million) or 839 per cent year-on-year. During the fourth quarter, net revenue from services stood as high as VND488 billion ($21.6 million), up VND92 billion ($4.1 million) or 23 per cent year-on-year.

The bad debts rate fell as low as 1 per cent by the end of December 31, 2016. Credit provision cost during the fourth quarter was as low as VND44 billion ($1.95 million), down 95 per cent year-on-year. However, the whole of 2016’s credit provision cost reached VND5 trillion ($221.5 million), up 7 per cent year-on-year.

The bank’s return on equity (ROE) and return on assets (ROA) were 10.9 per cent and 1 per cent respectively in 2016. It continued to be one of the leading banks in State budget contribution, with a total of more than VND2.274 trillion ($100.7 million) contributed to the State budget during the year.

This year, Vietinbank will completely settle bad debts instead of in 2018 as planned earlier and will keep bad debts at only 0.5 per cent of total outstanding loans in 2017. From 2007 to 2010, Vietinbank settled nearly VND10 trillion ($440.52 million) of bad debts through a provision of risk loans and a recoupment and sales of bad debts.

During the bank’s year-end conference that was held last month, Chairman Mr. Nguyen Van Thang revealed that Vietinbank will merge with PG Bank in the times to come. Also, the bank sets to raise its total assets by 15 to 17 per cent and outstanding credit by 18 per cent this year.

On an earlier note, the bank issued non-convertible five-year bonds worth VND2 trillion ($88.6 million) at annual interest rate of 5.8 per cent. Compared with the interest rates of other bonds issued recently, the 5.8 per cent rate is considered to be the lowest rate. It’s even lower than the 7 per cent interest rate per year for deposits that are over three years in Vietinbank. In December of 2016, the bank also issued 10-year bonds worth VND2.9 trillion ($128.5 million) at and interest rate of 7.5 per cent for the first five years.

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