In the 2019 annual report, Commercial Joint Stock Bank for Industry and Trade of Vietnam (HoSE: CTG) targets to increase the total assets by three to five percent compared to 2019, develop outstanding credit by six to 10%, ensuring the credit growth limit assigned by the State Bank of Vietnam (SBV). The bank also aims to ensure the ratio of bad debts on total outstanding credit below two percent.
VietinBank’s report mentioned that the world and domestic economy is forecasted to still contain many challenges and risks from trade and political tensions among major economies. In addition, the unpredictable movements of the Covid-19 pandemic have caused negative impacts on the global economy, and also affected a number of domestic industries.
In the scenarios which assessed the Vietnam’s economic growth under the assumption that the Covid-19 is controlled in the first and second quarters of 2020, the Ministry of Planning and Investment lowered the Gross Domestic Product (GDP) growth forecast in 2020 to 5.96 percent 6.25%, lower than the initial target of 6.8%.
Some typical industries, fields, and customers immediately hit by the pandemic which can potentially bring risks to banks are tourism, accommodation business, agricultural and aquatic product export, aviation transport, sea transport, textile and garment, oil and gas, rubber, and consumer goods, etc. FDI and import-export activities are under the pressure of declining due to the prolonged pandemic. The targets related to trade balance as well as favourable conditions for FDI and Foreign Indirect Investment (FII) to flow into Vietnam need to be observed more closely according to specific developments of the Covid-19. The US dollar/dong in the domestic is expected to see more volatility with greater trading amplitude as more variables occur in the market.
The Covid-19 pandemic has negatively affected the operations of businesses, especially those with large trade activities with partners from China, South Korea, European and American countries, etc. Accordingly, the business activities of commercial banks have also encountered major difficulties and challenges in implementing the 2020′s goals of VietinBank in particular and the system of commercial banks in general.
VietinBank said that it will continue to follow the plan to increase charter capital, maximise the measures to increase equity capital by issuing secondary bonds, improving investment efficiency, contributing capital, control risk weighted assets to reduce the pressure of raising equity capital. VietinBank will apply Basel II as soon as its capital is raised.
The bank also aims to focus all resources to carry out the objectives of the restructuring plan associated with dealing with bad debts in the period of 2016 2020 in accordance with the set roadmap, and pay attention to the settlement of bad debts, debts of which risk have been provisioned, debts which were sold to Vietnam Asset Management Company (VAMC), improving asset quality and enhancing financial capability.
VietinBank also plans a development strategy to 2030 and a medium-term business plan of 2021 2023 with a number of key orientations such as growing along with efficiency improvement, restructuring credit portfolio, increasing the proportion of small and medium enterprises (SMEs) and retail customers, diversifying revenue structure, and improving financial and capital cost management.
