Despite
the general impacts of monetary tightening policies in 2011, business
activities of banks continued growing.
Announced profits of some banks were better
than 2010, such as Vietinbank up 77.62%, Eximbank + 68.6%, SHB +50.82%, MBB
+29.03%. However, the increasing bad debt and overdue debts may affect banks’
results in 2012.
Habubank was the first bank reporting Q4 loss
of around 42 billion dong although it gained a profit in the whole 2011, which
signalled a very tough year for banks in this year.
Banking operation in 2011 started to see a
separation because the Central Bank relaxed credit growth limit for few banks
in late last year. According to financial reports, Vietinbank and Military Bank
posted a quite high credit growth, respectively at 25.25% and 31.26% while ACB,
Eximbank and Vietcombank achieved the credit growth of 17-20%.
Habubank only reported the 2011 credit growth
rate at -4.57%. In field of capital mobilization, four banks namely ACB,
Vietinbank, Military Bank and SHB had the deposit growth at 20% while that of
Sacombank and Eximbank declined 7.56% and 5.15%.
Credit growth pace of the banks was different
but generally, business performance of banks remained quite good compared with
2010. The highest after tax profit was made by Vietinbank with 5.784 trillion
dong, Vietcombank with nearly 4.528 trillion dong, ACB 3.194 trillion dong,
Eximbank over 3.051 trillion dong, MB 2.129 trillion dong, Sacombank 2.033
trillion dong, SHB 735.8 trillion dong and Habubank 348.8 billion dong.
Particularly, Habubank’s parent bank lost 41.7 billion dong in Q4 of 2011.
Return on Equity (ROE) of the banks was over 10% and Return on Asset (ROA) at
over 1%.
But, some indexes of operation quality of
banks signalled to go down. If difficulties in liquidity of banking system
continue prolonged, the deduction amount for prevention fund will be higher.
Many banks had the interbank loans accounting for 10-20% of their total assets.
Until the end of Q4 last year, the prevention fund of Vietinbank on the
interbank market was 26.1 billion dong against 2010’s 13.7 billion dong and of
Vietcombank was 18.9 billion dong (against 2010’s 9.8 billion dong).
Furthermore, the bad debt ratio as well as
Debt Group 2 of commercial banks surged rapidly compared with the same period
of 2010. Bad debt of the whole banking system took up 3.3% of total outstanding
loans, higher than 2010’s 2.14% level. Bad debt of Vietcombank only decreased
slightly whereas that of other commercial banks increased. Especially,
Habubank’s bad debt ratio surged from 2.39% in 2010 to 4.69% in 2011.
The commercial banks who saw a sharp rise in
Debt Group 2 were Habubank from 9.86% to 13.34%, Vietcombank from 5.27% to 8%,
and Military Bank from 0.6% to 1.76%.
In 2012, the State Bank of Vietnam (SBV) will
continue tightening monetary policies. The year’s credit growth is expected at
15-17%.
However, risks on bad debt and liquidity will
remain being big threat for profits of banks as from the first quarter of 2012.
Debt Group 2 tends to increase if customers still delay repayment for which
banks will be forced to transfer debt groups, which means that the deduction
for prevention fund will soar and banks’ profitability will go down.
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