Vietcombank expects profits not to fall in H1

The bank has not announced a profit target for the full year, with CEO Pham Quang Dung saying at the annual general meeting on Friday that it is pending approval from the State Bank of Vietnam.

Vietnam’s most profitable bank had earlier hoped for pre-tax profit growth of 10 percent this year and set a target of VND25.4 trillion ($1.1 billion).

Deputy Governor of the State Bank of Vietnam Dao Minh Tu told state-owned banks in mid-April to reduce profit targets by 30-40 percent this year and lend to businesses affected by the coronavirus pandemic at low interest rates.

Shareholders approved an increase in the bank’s charter capital by VND9 trillion ($387 million), or 24 percent, to ensure capital adequacy ratio and expand operations. Its charter capital is currently VND37.08 trillion ($1.6 billion).

It will do this in two ways: by issuing an additional 241 million shares, or 6.5 percent of its charter capital, to a maximum of 99 investors, possibly including existing shareholders and by capitalizing profits.

The bank said its bad debt ratio is set to almost double from last year to 1.5 percent due to the impact of the coronavirus.

It plans to achieve credit growth of 10 percent.