Viet Nam banks see profit growth slowing in 2008

Thursday, April 10, 2008
Two of Viet Nam's top three lenders by assets expect their profit growth to slow sharply in 2008 as the government takes measures to battle double-digit inflation.

State-run BIDV, Viet Nam's second-largest lender by assets, said on Thursday it planned to curb lending and expects annual gross profit growth to slow to 49% after surging 82% last year.

Total assets of the Hanoi-based BIDV, or the Bank for Investment and Development of Viet Nam, reached 211.6 trillion dong ($13.3 billion) at the end of March, 3.5% up from the end of last year, Chairman Tran Bac Ha told a news conference.

Ha said the bank is targeting a 23% rise in total assets this year from 204.51 trillion dong at the end of 2007.

Earlier on Thursday, Vietinbank's Chairman Pham Huy Hung told Reuters that the bank, Viet Nam's third-largest lender by assets, expects its profit growth to slow to between 50% and 60% this year after jumping nearly 84% last year.

The State Bank of Viet Nam, or the central bank, has told banks to cap lending at 30% this year and it tightened money supply in the first quarter as inflation hit 19.3% in March from a year earlier, the highest in more than 12 years.

BIDV's Ha said that though annual credit growth has been set, lending to export companies which deal with seasonal agricultural products can rise beyond the central bank's cap during a season.

"We have therefore proposed the government and the central bank to adjust the credit growth up to 35%," he said.

IPO CANDIDATES

Ha said the Finance Ministry was working on a timetable for the initial public offerings of major state-owned firms this year, but that BIDV had no plans to change the timing of its IPO.

"We wish and have reaffirmed to the government that we want to do it within this year," Ha said.

BIDV, one of five state-run commercial banks which the government initially ordered to sell shares to the public in 2007 and 2008, has hired U.S. investment bank Morgan Stanley to advise on the IPO.

Vietinbank has said it planned to come out its initial public offering this year, pending government approval. (Reuters)