Vietnamese commercial joint stock banks have announced huge profits in the first six months of the year despite a 20% credit growth cap.

Vietnamese commercial joint stock banks have announced huge profits in the first six months of the year despite a 20% credit growth cap.

Major listed banks, Vietcombank, Vietinbank, Eximbank and Sacombank all reported profit rise in their Q2 financial reports. Vietinbank made pre-tax profits of VND2.59 trillion (USD125.7 million), raising its total pre-tax profit to VND3.619 trillion (USD175.6 million), meeting 71% of the year’s target.

Vietcombank made a pre-tax profit of VND1.254 trillion (USD60.87 million) in Q2, bringing its total pre-tax profit to VND3 trillion (USD145.6 million) during the six-month period, up 8.2% against the same period of 2010.

Between January and June, Eximbank made a pre-tax profit of VND1.69 trillion (USD82 million), up 85% on-year. Sacombank’s pre-tax profit during the phase was estimated at VND1.49 trillion (USD72.3 million).

Navibank made a pre-tax profit of VND67.2 billion (USD3.3 million) in the second quarter, raising its first-half pre-tax profit to VND127.56 billion (USD6.2 million), up 72% on-year. This year, it is targeting a pre-tax profit of VND276 billion (USD13.3 million).

Dai A Bank made a pre-tax profit of VND220 billion (USD10.7 million) in the first half, fulfilling 44% of the year’s target.

Dong A Bank’s first-half pre-tax profit reached VND676 billion (USD32.8 million), meeting 52% of the year’s plan.

Profiting from loans

Nguyen Thi Ngoc Van, Deputy General Director of Dong A Bank, said the bank’s pre-tax profits derived mainly from lending activities.

An unnamed General Director of a joint stock commercial bank said the bank had reaped profits of over VND1 trillion (USD48.54 million) in the first half, with 80% though loans.

General Director of Vietcombank Nguyen Phuoc Than said that so far this year, the proportion of loans as a ratio of the bank\'s capital had substantially outstripped last year\'s figure of 60%, but he was unable to provide a more detailed figure.

An expert said, despite tightened credit growth, banks had still made major profits from lending, which revealed that they had exploited high interest rates.

In the first half of this year, Eximbank’s net income from lending activities increased by nearly 95% against the same period of 2010. Sacombank, Vietinbank and Vietcombank saw rises of 92%, 74% and 28.3% respectively.