Banks not to splurge on Tet bonuses despite surging profits

By Le Chi    January 16, 2020 | 11:25 am GMT+7
Banks not to splurge on Tet bonuses despite surging profits
Banking staff counting money at a branch in Hanoi. Photo by VnExpress.

Banks are likely to be conservative about paying Lunar New Year bonuses though many reported a big jump in profits last year.

An executive at private mid-sized lender Sacombank, who asked not to be named, told VnExpress that his bank has yet to complete its bonus assessments, but like every year the bonuses would be based on individual performances. This year they would be "higher than last year but not too much."

At its review conference in late December, Sacombank had estimated its 2019 pre-tax profits to be VND3.18 trillion ($137.33 million), up nearly 45 percent.

An executive at VietinBank, one of Vietnam’s three large state-owned lenders, said the Tet bonuses had been determined but declined to reveal details.

The bank’s employees had worked hard in 2019, helping it achieve its highest profit ever of VND11.5 trillion ($496.49 million), an increase of 83 percent from 2018, he said.

"The bonuses this year are calculated to boost the morale of employees who did well, fulfilled or exceeded targets."

But he also said the average bonus would be higher than last year but not "dramatically higher."

Vietcombank, another of the three state-owned lenders, too reported record profits of VND22.7 trillion ($980.2 million). It was also the bank with the highest profit last year.

But its management has said that as a public bank it cannot be too aggressive with Tet bonuses though it achieved excellent results last year.

At the 2019 review meeting in Ho Chi Minh City, State Bank of Vietnam Deputy Governor Dao Minh Tu said several banks were very profitable last year and exceeded their targets.

But they also need to retain their earnings for restructuring or improving their financial capacity, and so cannot be too generous in paying bonuses and dividends, he said.

This is especially true for banks with state ownership whose remuneration policies are strictly controlled by the government, he added.

All 11 banks which had published their results at the time of writing reported rising pre-tax profits, with private lender SeABank topping the list with an increase of 123 percent.

 
 
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