Unlike the past years, Vietnam Technology Commercial Joint Stock Bank (Techcombank) this year held the Annual general Meeting (AGM) on March 3rd. It is also the first bank in the system to hold AGM. Last year, the bank held its AGM on April 15th. Similarly, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) also completed its 2018 AGM on March 19th, while it was held on April 10th last year.
In addition to these two banks, many other banks also expect to hold AGMs early this year.
Asia Commercial Joint Stock Bank (ACB) has finalised its shareholder list and the AGM will be on April 19th. On March 29th, Vietnam International Commercial Joint Stock Bank (VIB) will carry out its 2018 AGM on March 29th instead of April 27th like in 2017. On the same day, Military Commercial Joint Stock Bank (MB) will hold its AGM, nearly one month earlier than last year AGM which was on April 26th 2017. Saigon Commercial Joint Stock Bank (SCB) has announced that its 2018 AGM will take place on March 28th, earlier than last year’s AGM (April 18th 2017).
Sharing with Dau tu Chung khoan newspaper, general director of Orient Commercial Joint Stock Bank (OCB) Nguyen Dinh Tung said that as many important contents need to be approved, the bank decided to hold the AGM early this year. This is very meaningful because year 2018 is considered as a favourable year, thus the AGM will be organised only to soon carry out business plan.
Since the stock market is positive this year with rising stock prices, plans to raise capital and attract foreign investment have been built. These contents must be submitted at the AGM for approval. Thus, the early organisation of the AGM is also to get approval in principle and authorisation for the Board of directors to actively set out the capital increasing plan and negotiation with foreign partners.
General director of SCB Vo Tan Hoang Van said that to carry out the plan to attract investors, SCB holds the AGM early to soon approve the operation policy in 2018. At the same time, the auditing will be carried out soon.
A notable deal in the banking sector is the investment worth 370 million USD in Techcombank by Warburg Pincus investment fund, announced only 10 days after the bank’s 2018 AGM.
The 2018 business plans of many banks submitted to shareholders all show very impressive profit growth. Nguyen Duc Vinh, general director of VPBank said that the bank has submitted shareholders the business plan in 2018 with pre-tax profit target reaching 10.8 trillion dong. The bank’s pre-tax profit in 2017 was 8.130 trillion dong, the highest level ever, increased by 65 percent compared to 2016, and equivalent to 120 percent of the plan adjusted in mid-2017. In 2017, the charter capital of VPBank increased from 9.181 trillion dong to over 15.706 trillion dong.
SCB’s general director Van said that the bank aims to grow profits this year by 36.85 percent to 224 billion dong, and total assets by 9.69 percent to 487.043 trillion dong. The bank will shift its financial structure towards increasing non-interest revenue, and promoting individual customer base, etc. SCB expects to increase charter capital to 16.6 trillion dong in 2018 and 18 trillion dong by late 2019.
Van added that the pre-tax profit of SCB in 2017 was modest at 164 billion dong (35 percent exceeding the annual plan), but the revenue from services and income from securities business were all high at respectively 871 billion dong and 626 billion dong, enabling SCB to settle bad debts, exempt or reduce interest rates for customers.
“Nevertheless, since SCB lowered interest rates and provisioned for risks, the profit was affected. The bank’s profit before interest rate cut and provisioning reached four trillion dong, but remained only several hundreds of billion dong after deducting interests and risk provisioning. The modest profit of SCB in 2017 is due to the fact that SCB is in the process of consolidating financial foundation, and the restructuring costs during the year was relatively high”, said Van.
Meanwhile, at Techcombank, general director of Information Nguyen Le Quoc Anh said that in 2018, the bank aims to reach revenue growth of 20 percent, pre-tax profit growth of 24 percent (reaching 20 trillion dong) compared to 2017. The bank expects to increase total assets by 17 percent, reaching 315.184 trillion dong, credit by 18 percent, mobilisation by 40 percent, and maintain bad debt ratio at less than 2 percent. Closing the year 2017, Techcombank recorded pre-tax profit of over eight trillion dong, and this was the second year it posted a double increase in profit compared to the previous year.
Saigon Securities Incorporation (SSI) stated that most banks will maintain the growth momentum in 2018 with average profit growth at 14 banks estimated at 32.9 percent. In particular, ACB targets the strongest profit growth of 120 percent, reaching nearly 5.830 trillion dong, Hochiminh city Development Commercial Joint Stock Bank (HDBank) aims to grow profit by 60.5 percent, reaching 3.885 trillion dong. Banks including VIB, Tien Phong Commercial Joint Stock Bank (TPBank), VPBank, and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) plan to increase profit by 37-40 percent in 2018.
Pham Hong Hai, general director of HSBC Vietnam assessed that the world economy in 2018 was forecasted by many experts to rise higher than 2017, with global investment continue to be poured into developing countries including Vietnam, thanks to the improvements of investment environment, and administration reform in recent time. Vietnam’s commitment to integration and numerous signed free trade agreements are opening many opportunities for enterprises, the market as well as the banking system.
Being in contact with diversified business environment is a good opportunity for domestic banks to improve their competitiveness and bring better services to the market.
Nirukt Spru, general director of Standard Chartered Bank Vietnam and five Asean and South Asia said that, compared to a few years ago, the health of the banking sector in the recent time has been much improved and positively supporting the economic growth. This has been recognised by many international credit rating agencies, seen through their rating increase of Vietnamese banks in the recent time.
The State Bank of Vietnam (SBV) has gained important achievements in managing monetary and credit policies, stabilising exchange rates and interest rates, settling bad debts and implementing plans to restructure the banking sector in phase 2. According to Nirukt Sapru, these achievements have helped reduce the risk of market volatility, increase competitiveness of Vietnam’s exports to other Asean economies, attract foreign direct investment, and build public confidence in SBV’s management capacity and policies.
The determination of the government in handling bad debts and the efforts of SBV to strengthen communication on the progress of the banking sector has also help consolidate the trust of the market, protect the interests of depositors and investors, and also support the development of a stronger, safer and more efficient banking system. Although there is still much work to do, the progress of the banking sector is very encouraging and we expect that this will continue to be promoted in the near future, said Nirukt Sapru.
