Banks’ earning profiles in 2012 considerably changed from the previous year, with a significant drop in profits from credit operations and a greater share in service incomes, said a senior source from a big bank.

Several banks have obtained data on performances of their parent banks in 2012. In terms of profits, banks can be classified into three groups.

The first group consists of those with relatively high profits, achieving 50-80% of their targets for 2012. Meanwhile, the banks in the second group only met 20-30% of their profit targets and those in the third group made trivial profits or incurred losses last year.

Banks are calculating and considering their 2012 business results. Several of them have already submitted their reports to the State Bank of Vietnam and some others are revising risk provisions upon request of the central bank, meaning their profits will be reduced.

Risk provisions greatly pushed down banks’ profits last year. Most banks were checked by the central bank’s inspection agency for cross-ownership, group lending and compliance.

Almost all banks were asked to raise risk provisions and fined for their violations, said the leader of a big bank, who asked not to be named due to the sensitivity of the information.

Two large State-run banks are still being inspected by the Government Inspectorate.

In 2012, profits from credit operations sharply fell due to a decline in credit quality. On the other hand, earnings from services made up higher percentages in total revenues of many banks, mainly because of the drop in credit revenues.

Medium-sized banks and those in the second and the third groups had higher percentages of service revenues than big banks.

The consolidated business results of banks to be announced in the coming time will show the difference among them.

Military Bank (MB) last year earned VND612 billion from services, up 19% against 2011, a growth that many banks yearn for. The bank’s pre-tax profit is put at VND3 trillion.

Meanwhile, Bank for Investment and Development of Vietnam (BIDV) gained some VND4.24 trillion in pre-tax profit and achieved a credit growth of 16.2%. For this year, BIDV aims at a growth of 18-20% in profit and 12% in outstanding loans.

The pre-tax profit of Bank for Foreign Trade of Vietnam (Vietcombank) in 2012 is around VND5.7 trillion, versus VND5.69 trillion in 2011. The bank set aside VND3.1 trillion for risk provisions.

Vietnam Bank for Industry and Trade (VietinBank) earned a pre-tax profit of VND8.2 trillion last year, a decline from nearly VND8.4 trillion in 2011. The bank’s credit growth is estimated at 13-15%.

VietinBank looks to achieve a credit growth of 20% and a bad debt ratio of less than 2% in 2013.

Asia Commercial Bank (ACB) in 2012 earned VND1.2 trillion in pre-tax profits. The lender sets a credit growth target of 15-20% and a deposit growth target of 20-30% for this year.

Vietnam Bank for Agriculture and Rural Development (Agribank) eyes a capital growth of 12-13% and a credit growth of 12% in 2013. Last year, it recorded a rise of 8.2% in outstanding loans, said Nguyen Ngoc Bao, chairman of the bank’s board of members.

The Saigon Times Daily