Despite the first quarter of this year, many banks have reported trillions of dong of profits, equal to half of the performance last year. For example, HDBank is one of the banks with unexpected profit growth in 2017 with the estimated profit in Q1/2018 at 1.050 trillion dong.
In 2017, HDBank earned more than 2.4 trillion dong pre-tax profit and this bank plans to set the profit target for this year at 3.921 trillion dong, up 65.3 percent from the previous year. As such, with the set profit target, in the first quarter of 2018, this bank completed more than 25 percent.
HDSaison the finance company that HDBank holds more than 50 percent stakeis the main contributor to HDBank’s strongly growing profit last year as well as expected profit this year. HDBank leaders said the profit from HD Saison is currently accounting for about 30 percent out of the bank’s total profit in recent years.
Meanwhile, MB said in Q1/2018, the bank’s revenue touched 3.5-3.6 trillion dong, and the minimum pre-tax profit was 1.6 trillion dong, up more than 44 percent from the same period of 2017, equal to about 6.8 trillion dong.
According to information from TPBank, by the end of February 2018, the bank’s pre-tax profit reached 275.8 billion dong, nearly doubling from the same period of 2017.
At the recent AGM on March 28, Pham Doan Son, CEO of LienVietPostBank said in the first quarter of this year, the bank is estimated to earn more than 500 billion dong profit, completing 28 percent of the annual plan and increasing more than 6.5 percent from the same period last year. LienVietPostBank’s pre-tax profit target in this year is 1.8 trillion dong.
*Decreased provisioning
Trinh Van Tuan, Chair of OCB said the bank’s profit in Q1/2018 is estimated to reach 600 billion dong, an increase of 2.4 times from the same period last year, equal to 30 percent of the annual plan. One of the reasons for the bank’s increased profit is positive profit and decreased pressure on provision.
The bank has had better condition in bad debt settlement since the National Assembly’s Resolution on pilot settlement of bad debt at credit organisations. OCB sets the 2018 pre-tax profit target at two trillion dong, doubling from the previous implementation.
OCB’s profit target this year is considered as a breakthrough from the previous years. OCB said the expected risk provisioning budget for 2018 is 500 billion dong. However, the bank is more likely to recover the entire 728 billion dong bad debt of the Vietnam Asset Management Company (VAMC) without having to put for provision.
However, the management board has not included this in the estimated profit before tax of two trillion dong in 2018. On the other hand, with the profit achieved in the first quarter of this year, the leader of OCB said the bank is confident to complete the entire year target, even higher.
VIB also reported the pre-tax profit of more than 500 billion dong in Q1/2018, three times higher than the same period of 2017. The whole year profit plan is approved by VIB’s management board at 2.005 trillion dong. However, the bank said that is just the floor level which is expected to be higher. The provisioning of VIB in this year is about 420 billion dong.
VIB leader said the target of more than two trillion dong profit this year is based on floor credit target, not ceiling one. That means in any case, in any credit growth scenario, the lowest level is the profit of 2.005 trillion dong. VIB’s credit room assigned by the State Bank at the beginning of this year is 14 percent. However, VIB is also confident that in Q1/2018, the bank earned 510 billion dong, so for the entire year, and it is very likely to earn 2.4-2.5 trillion dong, not just two trillion dong.
The banking sector 2018 is expected to still have factors that accelerate credit growth and the bad debt settlement continues to be improved thanks to the Resolution No.42/2017/QH14. As a result, the profit of the banking sector is expected to increase about 30 percent.
According to analysts of KIS Vietnam Securities Company, the bank’s positive business results will be the motivation for the growth of King shares and accelerate the listing of banks in this year such as OCB, TPBank, and VIB.
