HANOI, Jan. 11 (Xinhua) -- Many banks in Vietnam reported good business performance last year, mainly due to improved bad debt resolution and rising income from services, local media reported on Friday.
Vietcombank's 2018 pre-tax profit hit a record high of 18 trillion Vietnamese dong (782.6 million U.S. dollars), surging 63 percent against 2017 despite the central bank's credit slowdown, daily newspaper Vietnam News reported.
Vietcombank's non-performing loans (NPLs) accounted for only 0.97 percent of outstanding loans by the end of 2018, the lowest level among local banks, while its retail credit proportion rose from 39.6 percent in 2017 to 46.2 percent in 2018.
Agribank made a pre-tax profit of 7.53 trillion Vietnamese dong (327.4 million U.S. dollars) last year, aided by bad debt reduction to 2.78 percent and rising service revenue of 20 percent.
Meanwhile, TPBank boasted a pre-tax profit of 2.26 trillion Vietnamese dong (98.3 million U.S. dollars), doubling the figure in 2017; and VIB's profit skyrocketed by 176 percent to 1.72 trillion Vietnamese dong (nearly 74.8 million U.S. dollars), following great efforts to tackle NPLs.
According experts, banks gained high profits despite the credit slowdown because they have promoted non-credit revenues and focused on higher margin business segments such as retail credit. A decrease in NPLs also contributed significantly to profits last year.
The total loans of Vietnam's banking system grew 14 percent in 2018, falling short of the target 17 percent, according to the State Bank of Vietnam, the country's central bank.
As of the end of 2018, the local banking system resolved nearly 150 trillion Vietnamese dong (6.5 billion U.S. dollars) in bad debts, lowering the bad debt ratio to 1.89 percent as per banks' balance sheets, down from 2.46 percent in 2016 and 1.99 percent in 2017.
The central bank has set the 2019 credit growth target at about 14 percent. In 2017, total loans of Vietnam's banking system expanded by 18.17 percent, surpassing the target of 18 percent.