Vietnamese banks H1 profits surge

One of the country’s top lenders, Vietcombank, reported profit before tax of VND8 trillion ($344 million), a year-on-year increase of 53 percent.

But its interest income only grew by 19 percent, less than most other income categories, it reported.

Non-interest income, including recovered debts, accounted for VND2.4 trillion ($103 million), an increase of 162 percent.

VPBank, which has reported the second highest profits after Vietcombank so far, saw a similar trend.

Its profit before tax was almost VND4.4 trillion ($190 million), an increase of 35 percent.

Interest income increased by 27 percent, while almost VND1.6 trillion ($69 million) came from other categories, 100 percent up from last year, half of it from recovery of bad debts.

Military Bank’s profits were mostly from fees and other non-interest sources.

VietBank tripled its profits thanks to investment in stocks, while Bac A Bank reported huge profits due to a fall in contingency due to a fall in provisioning for bad debts.

But two banks bucked the trend.

VIB tripled its profit before tax to VND1.1 trillion as interest income rose by 55 percent to VND2.2 trillion.

LienViet Post Bank was the only lender to report a fall in profit, which decreased by 10 percent to VND2.3 billion.

It explained that this was due to marking to market the stocks it had invested in, which refers to valuing assets at current prices, and rising costs due to branch expansion.

Vietnam now has seven wholly-owned foreign banks, as well as 50 branches and more than 50 representative offices of foreign banks and joint-venture banks. Their total assets have topped $35.8 billion.