Despite 2012 is predicted to be a very tough year, a lot of commercial banks still are setting a high profit plan based on their optimistic vision on the market.

Among top commercial banks, Vietinbank announced that its pre-tax profit growth in 2012 was targeted at 20% against the year earlier, total assets up 20%, total deposits +25%, total outstanding loans +20%, bad debt ratio at below 3%, charter capital expected at 30 trillion dong, CAR ≥ 10%, and the ratio of service revenue on total business revenue at 10%.

Reportedly, the lender posted the pre-tax profit of 8.105 trillion dong, total assets of 460.421 trillion dong, NPL ratio of 0.74% on total outstanding loans, Return on Equity (ROE) at 25.4%, Return on Asset (ROA) at 1.96%, and a dividend of 20% in 2011.

Similarly, Vietnam Bank for Investment and Development (BIDV) also planned to reach pre-tax profit of 5.8 trillion dong in 2012, increasing 30% on year.

This year, BIDV’s ROE target was raised from 13% of 2011 to 17%, CAR expected at over 10%, total assets at 50 trillion dong, up 17% on year while its bad debt ratio is estimated at 2.8%.

In addition, DongABank set 2012 profit at 1.650 trillion dong, a growth of 131.5% compared with 2010’s actualized 1.255 trillion dong, charter capital that is planned to be increased to 6 trillion dong from 4.5 trillion dong, total assets up from 64.559 trillion dong to 100 trillion dong, and total credit from 44.005 trillion dong last year to 50.600 trillion dong in 2012.

Military Bank also expects to gain total assets growth rate of 22% and chartered capital increase of 64% in this year, rises in deposits and total loans estimated at 21% and 15% respectively against 2011. Furthermore, MB targets to expand its network to 240 points.

Even small-sized lender KienLongBank also offered the quite impressive business plan for 2012 with pre-tax profit of 710 billion dong, a dividend rise of 30-40% compared with 2011, bad debt ratio at less than 2% of total loans, extra 30 branches and transaction offices in 2012. Last year the bank earned pre-tax profit of 522 billion dong, leaping 102% on year.

Given explanation about such high business plans, Tran Phuong Binh—General Director of DongABank said that there were still many opportunities in the difficult context. Especially when the information that the SBV may merge 5-8 banks was released, it will become the big chance for remaining banks in business.

Most of banks that set high business targets for 2012 are large-sized while small to medium sized banks seemed to be silent in announcing profit plan.

A banker said that such impressive profit plan of banks was based on highly increasing capital size (charter capital) so the banks’ profit target remains modest, for those with charter capital of 5-10 trillion dong.

Noticeably, bad debts of commercial banks increased last year, which is forecasted to be higher as the credit flow for debt swap will be more difficult as the Central Bank will close the gaps of credit growth of commercial banks such as corporate bonds and investment mandate. By that time, commercial banks will have to deduct more money for risk prevention fund that will impact their real profits.

Source: Vietbiz24