Banks to profit from calm approach

Last year, no bank reached its proposed profit targets. Now, several small banks have unveiled business plans in 2013 fiscal year as the annual general shareholders meeting season approaches.

“Mekong Bank expects this year’s profits will be better than last year’s,” said the bank’s chief executive officer Tay Han Chong.

Accordingly, the bank pegged its profit target in 2013 at VND300 billion ($14.3 million) against realised level VND147 billion ($7 million) in 2012.

Chong, however, said the bank would incur pressure in materialising this set profit target since great challenges exist when it comes to credit expansion in 2013.

“Finding good customers is a major hardship in boosting lending. Banks should be cautious in the face of surging bad debts and rising inventories, making growth targets realistic,” said NamA Bank director Tran Anh Tuan.

Tuan saw banks pushing ahead with restructuring plans to enhance risk management expertise, particularly risks associated with credit activities to curb bad debts as the best option in current circumstances.

NamA Bank put its 2013 profit target at VND600 billion ($28.5 million), similar to 2012.

Orient Commercial Bank (OCB) chief Trinh Van Tuan supposed bad debts would continue to threaten credit expansion in 2013 albeit admitted ‘numerous growth opportunities exist for banks in 2013.’

OCB set its profit target this year similar to what it had planned last year at VND530 billion ($25 million).

“Eximbank must do its utmost, striving to effectively tap market opportunities to accomplish $3.2 trillion ($152 million) profit target this year,” said the bank’s director Truong Van Phuoc.

Experts assumed a raft of measures were needed to stimulate market aggregate demand and help firms unclog hardships to break current credit growth impasse.