Banks report rosy first-half profit picture

Vietcombank expects reaching more than half of its full-year profit target in the first half

Banks have been doing rather well this year. In the first half, state giant Vietcombank expects to surpass half of their 2018 profit target, according to the bank’s board chairman Nghiem Xuan Thanh.

Initially, Vietcombank set their pretax profit target for 2018 at VND12 trillion ($533 million). Later, it raised the figure to VND13 trillion ($577 million), which was approved by the shareholders at the bank’s annual general shareholders’ meeting in April 2018.

Industry analysts, however, forecast that the bank’s pre-tax profit could reach VND14 trillion ($622 million) this year.

General director Do Minh Toan of Ho Chi Minh City commercial lender ACB expects the bank to exceed 50 per cent of their full-year profit target for 2018 in the first six months.

ACB set its 2018 profit target at VND5.669 trillion ($252 million). With the commitment to effectively tackle bad debts to retrieve around VND500 billion ($22.2 million) loss provisioning, ACB expects that profit might touch VND6 trillion ($266.6 million) this year.

In the first quarter, ACB’s profit saw a 151 per cent jump on-year to VND1.491 trillion ($66.2 million).

Not only sizeable banks, small and medium banks have also posted positive profit figures in the first two quarters of this year.

The deputy general director of one of these banks based in Ho Chi Minh City revealed that the bank counted more than VND1 trillion ($44.4 million) in pre-tax profit in the first quarter and expects an even higher figure in the second quarter of this year.

Hence, the full-year profit target of more than VND3.9 trillion ($173 million) is well within reach. The bank executive has attributed rosy profit figures to a positive credit growth, rising incomes from services segment, and lower provisioning.

The directors of several banks said they have nearly achieved the credit growth targets assigned to them by the central bank (SBV) for this year and expect additional assignments.

The upbeat business performance of the banks have exerted upwards pressure on their tickers, which is expected to continue as banks will soon officially announce their business results in the first two quarters of the year.

Securities analysts, however, noted that retail investors need to have long-term vision when injecting money into bank tickers. As banks go on the bourse, investors might face a risk as the tickers have been rising for quite a long time now.