Banks in Vietnam report hefty profits in 2005

State-owned and joint stock banks in Vietnam were much profitable last year, which may prompt some banks to issue more shares to foreign investors this year, local newspaper Vietnam News reported Monday.

The biggest moneymaker in 2005 was the state-owned Bank for Foreign Trade of Vietnam, which made pre-tax profits of 3,250 billion Vietnamese dong (VND) (204.4 million U.S. dollars). Its after-tax profits were 2,000 billion VND (nearly 125.8 million dollars).

The state-owned Vietnam Bank for Agriculture and Rural Development posted a profit rise of 59.3 percent over 2004, which brought a jump in income for its staff. The bank's General Director Le Van So said his staff's salary increased, on average, by 40 percent last year.

Among joint stock banks, the Technological and Commercial Joint Stock Bank experienced the highest growth with a 170-percent surge in pre-tax profits to reach 286 billion VND (nearly 18 million dollars). The biggest profit in absolute terms was achieved by the Asia Commercial Bank with pre-tax profits of 385 billion VND (24.2 million dollars), up 39 percent against 2004.

Other joint stock banks, including VP Bank, Habubank and Eastern Asia Bank, also maintained a high profit growth in 2005. As a result, they paid dividend of more than 20 percent to their shareholders.

The good performance may lead joint stock banks to sell more shares to foreign banks. VP Bank's General Director Le Dac Son said selling shares to foreign investors is the quickest way to gain international managerial skills. It also helps increase chartered capital, which is critical for banks to expand their networks and upgrade their technologies, he said.

VP Bank plans to increase its chartered capital from 310 billion VND (19.5 million dollars) to 550 billion VND (34.6 million dollars) by June, and to 800 billion VND (50.3 million dollars) after that, by selling shares to foreign investors. Son said his bank is negotiating with foreign partners.

The sale of shares of joint stock banks to foreign investors has been allowed by the State Bank of Vietnam, the country's central bank. In 2005, three joint stock banks sold their shares to foreign investors at high prices, said the report.

Source: Xinhua