This year’s annual shareholders meeting (AGM) season of banks takes place two months later than usual due to the impact of the Covid-19 epidemic. Up to June 21st, many banks have not held the meeting year.
Due to the Covid-19 epidemic, in the 2020 business plans that have been approved by banks’ shareholders or those which are being drafted for submission to the upcoming AGM, there is a common point that the goals this year are set cautiously instead of ambitious targets like in the previous years.
Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) the best bank in the system with profit in 2019 far exceeding 23 trillion dong. Last year, the bank’s Chair of the Board of directors (BOD) Nghiem Xuan Thanh repeatedly mentioned that profit of 25 trillion dong or more would be recorded this year. However, in the document prepared for the AGM on June 26th, the figures of business targets have not been specifically listed by the bank.
Previously, Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) held its AGM but left the profit plan open.
Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) is the first bank to hold the AGM this year, when the Covid-19 epidemic has not occurred and the economy has not been affected. The bank targets a profit target of 12.5 trillion dong this year, but its plan surely must be adjusted soon because the bank itself has used more than 200 trillion dong for providing preferential loans to customers hit by the Covid-19, not to mention the outstanding credit of hundreds of trillion dong which have been restructured, rescheduled, etc. under Circular 01 of the State Bank of Vietnam (SBV).
Previously, the SBV’s deputy Governor Dao Minh Ty said that state-owned banks this year may have to sacrifice 30-40 percent of their profit to support customers. According to calculation of Tri Thuc Tre, the number of profit decline of the four state-owned banks themselves can be around 20 trillion dong.
For the group of private joint stock banks, if banks such as Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Vietnam Prosperity Commercial Joint Stock Bank (VPBank) or Military Commercial Joint Stock Bank (MB) set fairly high targets in previous years, their goals this year are prudent.
General director of VPBank Nguyen Duc Vinh said that based on the results of 2019 with profit of more than 10 trillion dong, the bank’s leader board once planned for a profit of about 13.5 14 trillion dong in 2020. However, due to the outbreak of the Covid-19, the bank must cut the profit target to share with customers, including the reduction of salaries for employees. Thus, this year’s business plans are finalised even lower than last year, and “the bank will strive to achieve the same or higher results than 2019 if the epidemic is well controlled,” said the bank’s leader.
For Techcombank, in the AGM held on June 20th, the bank also expects a modest profit growth of one percent compared to 2019, instead of double-digit growth rates which have been achieved throughout 2013 until now.
On June 24th, MB’s AGM will be held. The bank is also estimating a 10 percent drop in profit due to the impact of the epidemic. Therefore, MB’s profit this year will fall to about 10 trillion dong.
In other banks, the profit plans for this year are also prudently set. Some banks target a profit growth of just a few percent to about 10%, while most banks set to see a profit decline of 10-20%. Few banks plan a profit growth of nearly 50 percent but they are the cases which expect revenues to be accounted in profit this year, or cases of which their absolute profit are low at a few hundreds of billion dong or below one trillion dong.
According to forecasts of securities companies, the profit of 18 listed banks this year will fall by at least 10%. Therefore, it is understandable if banks have been cautious when making plans.
