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Foreign banks reap fat profits in 2009   2009-12-17 - VietNamNet/TBKTVN

Foreign credit institutions in Vietnam reportedly expect high profits for 2009 and have seen high asset growth rates.


According to the State Bank of Vietnam in 2009 foreign credit institutions have all had  satisfactory business results, especially in terms of profit, total asset increase, capital mobilization and credit growth.


A representative of the State Bank of Vietnam said at the year-end meeting with foreign banks in Hanoi that despite difficulties due to the economic downturn, foreign banks have obtained high profits. It is expected that in 2009, foreign bank branches and 100 foreign owned banks will record a  pre-tax income of 2,612 billion dong, while mobilized capital and outstanding loans will increase by 17.8 percent and 10.8 percent, respectively. The total assets of the group of banks are expected to increase by 14 percent compared to the end of 2008.


Joint venture banks have also had a satisfactory year in 2009 with stable growth, a pre-tax income of 477 billion dong. The increases in mobilized capital, outstanding loans and total assets over the previous year are 18.2 percent, 34.3 percent and 18.3 percent, respectively.


Non-bank credit institutions have reportedly seen mobilized capital increase by 17.5 percent in the fist 10 months of the year; outstanding loans increase by 41.8 percent and total assets increase by 40.5 percent in comparison with the end of 2008.


The figures, according to experts, represent a very good business result for foreign banks, considering their small scale of capital (most of them have around one trillion dong in chartered capital) and narrow network. Meanwhile, foreign banks bear some restrictions in doing business in Vietnam in comparison with domestic banks.


The noteworthy thing is that the credit growth rate of joint venture banks and non-bank credit institutions is relatively high this year, while the mobilized capital growth rate this year is lower than the previous year. In 2008, the total capital mobilized by foreign institutions increased by 45 percent.


According to the State Bank of Vietnam, there are 45 branches of 33 foreign banks now operational in Vietnam, five joint venture banks with 20 independent branches and five 100 percent foreign owned banks. Besides, there are eight foreign invested non-bank credit institutions and 56 representative offices of other credit institutions.

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