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BANKING & FINANCE

Into calmer waters highest in the market, at up to some $650,000
if customers use Digital OTP. MBBank also
successfully implemented electronic Know
Your Customer (eKYC), helping it attract a
After a relatively positive 2020, many local banks have set ambitious large number of new customers by simplifying
plans for 2021 profits. account openings. “Our goal for 2021 is to
accelerate digitization, promote retail, and
T HUNG CAO REPORTS maintain our position among the Top 5 banks
in Vietnam - while striving to reach the Top 3
- in terms of quality and efficacy and continuing
to lead in digital transformation,” Mr. Thai
told VET. “We aim to post pre-tax profit growth
of 25-30 per cent against 2020, and have set a
goal of having a consolidated non-performing
loan (NPL) ratio of below 1.3 per cent.”
Similarly, VietinBank, one of the leading
State-owned commercial banks in the country,
achieved outstanding results last year, with
total operating revenue up 11.7 per cent and
consolidated pre-tax profit 45 per cent. 2020
business outcomes were the result of an entire
process of tremendous effort and buildup,
proactively restructuring the bank’s operations
under the restructuring plan for the 2016-
2020 period, the mid-term plan for 2018-
2020, and growth model transformation asso-
ciated with efficiency improvements. Having
posted impressive revenue figures last year,
it is targeting 10-20 per cent growth in profit
PHOTO: VIET TUAN
and 3-6 per cent in total asset value, while
ietnam’s excellent response and com- the State Bank of Vietnam (SBV) in an effort the NPL ratio is to be kept below 2 per cent
mitment to the containment of Covid- to support local enterprises during the difficult as of the end of 2021.
V 19 helped the country emerge largely days of the pandemic. In order to increase their profits, banks
unscathed from the global pandemic. Its One of the largest joint stock commercial will maximize revenue and reduce costs,
banking sector continued to post positive banks, Military Bank (MBBank) reported according to Mr. Hoang Cong Tuan, Head of
performance last year, which laid a solid year-on-year growth of 6.5 per cent and 4.4 the Macroeconomic Research Division at MB
foundation for local banks to post strong per cent in consolidated profit and MBBank’s Securities Company (MBS). “In particular,
growth this year. The banking sector therefore profit, respectively, citing the push towards credit through direct lending and investment
boasts a fairly bright outlook if the economy digital transformation as a key growth driver. in corporate bonds are the two main ways of
returns to solid growth, and many banks have “Our digital banking attracted about 2 million increasing net interest income, which is the
set high profit targets for 2021. new users, bringing the number of transactions main contributor to operational income,” he
“Vietnamese banks were able to modestly to 90 million, or three-times higher than in said. “Credit growth last year of nearly 20 per
increase their core capital ratios in 2020 as a 2019,” said Mr. Luu Trung Thai, Vice Chairman cent at major commercial banks and the move
result of good profitability, regulatory restric- and CEO of MBBank. “More significantly, to loosen credit limits in the second half of
tions on dividend payouts during the year, over 84 per cent of transactions were con- the year for large- and mid-sized banks shows
and sustained investor confidence,” Moody’s ducted via digital channels.” that they were still able to meet customers’
Investors Service noted in its latest research, The bank’s transaction limit via app is the credit needs despite the Covid challenge.”
entitled “Effective pandemic response posi-
tions Vietnam and its banks for further
progress”, released in late March. “We expect MEASURES TO AID BORROWERS HAMPER IMPROVEMENTS IN PROFITABILITY
this trend to continue in the next 12-18 months, Pre provision income (PPI) ROA - left axis Credit provisions % PPI - right axis
% Total assets - left axis
helping Vietnamese banks emerge from the
pandemic with stronger profitability and cap- 3.0% 100%
italization than before.” 90%
2.5%
80%
70%
Ambitious plans 2.0%
Total pre-tax profit in Vietnam’s banking 60%
sector was $5.43 billion in 2020, up 15.5 per 1.5% 50%
cent year-on-year, according to figures from 40%
SSI Research. Joint stock commercial banks 1.0% 30%
were the primary contributors, posting 21.2 0.5% 20%
per cent growth year-on-year, while their 10%
State-owned counterparts only reached 7.7 0.0% 0%
per cent, largely due to slowdowns in credit 2016 2017 2018 2019 2020
growth and interest rate cuts mandated by Sources: Banks, Moody’s Investors Service

42 | VIETNAM ECONOMIC TIMES | APRIL 2021

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