Banks set modest 2014 profit targets

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Saigon Bank for Industry and Trade’s general shareholder meeting (GSM) was held today, April 26.

The bank’s management reportedly was seeking shareholder approval for a chartered capital hike of VND920 billion ($43.8 million) to VND4 trillion ($190 million) as well as a plan to hike total asset value 12.5 per cent, deposits 6.5 per cent and lending 5 per cent.

Sources said it set a pre-tax profit target of VND23 billion ($1.1 million), only $95,000 up against last year.

Last year, Saigon Bank posted VND228 billion ($10.8 million) in pre-tax profits, 2.75 per cent over its goal.

It kept bad debts reigned in to 2.24 per cent, while deposits rose a mere 1.07 per cent against a 7 per cent target. Similarly, lending grew 1.85 per cent against a 7 per cent target.

On April 29, Navibank will host its GSM.

This year the bank is contemplating upping chartered capital from VND3.010 trillion ($143 million) to VND4.510 trillion ($214 million) via the issuance of convertible bonds. Additionally it plans to reduce bad debts to 3 per cent and post pre-tax profits of VND96.3 billion ($4.5 million).

Last year Navibank only saw VND23.9 billion ($1.1 million) in pre-tax profits while bad debts were at a high 6.07 per cent. It sold VND768 billion ($36.5 million) in overdue loans to state-owned Vietnam Asset Management Corporation (VAMC).

Navibank is one of nine weak banks subject for restructuring under central bank instructions.

DongA Bank is seeking shareholder approval for its plan to hike chartered capital by 20 per cent to VND6 trillion ($28.5 million) with VND500 billion ($23.8 million) in pre-tax profits – only half of last year’s target but still higher than actual earnings.

The bank’s general director Tran Phuong Binh said banks were more focused now on safe operations rather than high profit targets.

Last year the bank’s pre-tax profits came to VND989 billion ($42.7 million); this was then more than halved by debt provisioning, down 44 per cent on-year and only 43 per cent of the annual target;. 

Banks due for restructuring generally saw lower profits in 2013. Southern Bank only reached 3.2 per cent of its projection for last year with VND18 billion ($857,000) in pre-tax profits.

Though in the latter stages of a merger with Ho Chi Minh City-based Sacombank, Southern Bank still sought shareholder approval for its ambitious 2014 profit target of VND360 billion ($17 million) at its GSM meeting earlier this month.

By the end of 2013 the bank held the paper on VND1.6 trillion ($76 million) in overdue loans, of which VND1 trillion ($47 million) were classified as group 5 (unrecoverable).

Former State Bank Governor Cao Si Kiem said banks should not expect much credit growth this year as firms are still struggling with reduced production due to low consumption.