14:21 | 21/03/2016 Finance - Banking
(VEN) - In addition to good growth from services, a strong increase in the total assets is seen as a big engine for commercial banks to complete business objectives in 2016.
The total assets of the banking system reached more than VND7,300 trillion by December 2015
Many commercial banks announced income statements in 2015 with impressive figures in order to prepare for the shareholder meetings in the first quarter of this year.
The Vietnam Technological and Commercial Joint Stock Bank (Techcombank)’s growth reached nearly 45 percent in 2015. Its unaudited income statement in 2015 shows that consolidated pretax profit stood at VND2.037 trillion, an increase of 43.8 percent compared to 2014. Net income increased by 22.8 percent compared to 2014 thanks to credit growth of nearly 30 percent. In particular, revenues from services and fees increased by 11.2 percent, reaching VND1.139 trillion. Return on equity (ROE) and return on assets (ROA) reached 10.1 percent and 0.9 percent, respectively. Techcombank’s total assets increased from VND175.902 trillion in 2014 to VND192.009 trillion in 2015, a year-on-year increase of 9.2 percent. Thanks to risk management measures, the bank’s bad debts declined to 1.67 percent.
The An Binh Commercial Joint Stock Bank (ABBANK)’s total assets reached VND64.664 trillion in 2015, a drop of VND2.534 trillion compared to 2014, equal to 91 percent of the annual plan. Its reduction was due to the State Bank of Vietnam (SBV)’s guidelines in terms of declining scale of operations in the interbank market. Outstanding loans stood at VND30.915 trillion and capital raising totaled VND47.881 trillion, while pretax profits reached VND117 billion. In particular, the rate on bad debts to outstanding loans was controlled below three percent.
According to the latest financial report announced by the Saigon-Hanoi Commercial Joint Stock Bank (SHB), pretax profits stood at VND1.026 trillion, while credit growth increased by 26 percent. Deposits also witnessed a strong increase of 20.7 percent and bad debts reduced to 1.72 percent.
Capital adequacy ratio exceeds regulations
According to the SBV’s statistics on the activities of credit institutions in December 2015, the total assets of the banking system reached more than VND7,300 trillion, an increase of 12.35 percent compared to the same month in 2014.
State-owned commercial banks including Agribank, VietinBank, Vietcombank, BIDV, CB, GPBank and OceanBank increased by more than VND130 trillion in assets, reaching over VND3,303 trillion, while joint-stock commercial banks totaled VND2,928 trillion and joint-venture banks stood at VND756 trillion.
The banking system’s equity reached VND578 trillion by December 2015, a year-on-year increase of 16.4 percent. Income statements in the last quarter of last year showed positive signs thanks to an increase in profits.
Chartered capital in the whole system also increased by VND344 billion, totaling VND460 trillion, while capital adequacy ratio reached 13 percent, higher than regulations set out by the SBV.
Commercial banks achieved higher efficiency in activities in 2015. Improved credit quality will enable banks to meet favorable conditions in 2016.