Banks finding hard to achieve profit targets

Not only small banks, even some large banks also admitted that they are finding it rather hard to achieve the profit target for this year, VietBiz24.com reported on Friday.
In the January-August business report, pre-tax profit of Orient Commercial Bank (OCB) was estimated at only 225 billion dong, while its profit target for the whole year was set at 500 billion dong.

A representative of Sacombank Group said, till Sept. 30, pre-tax profit of the parent bank (excluding its affiliated companies) was estimated at 2.174 trillion dong, compared with the profit target given for the whole year at 2.8 trillion dong and expected profit target at 3 trillion dong.

Many experts, when evaluating the profitability or business results of banks, it is necessary to have a comprehensive view, rather than just looking at figures. A bank that gains high profits is not really a good one, because for profit, that bank may accept an asset structure with high risks.

Therefore, when considering the profit targets, profit should be analyzed in relation to the management of other indicators, such as the level of liquidity, risk tolerance, asset structure and others.

Specifically, in analyzing and evaluating the profitability of banks, many different criteria can be measured, such as the ratio of return on assets (ROA), the ratio of return on equity (ROE ), return on total revenue and earning per share (EPS).

So experts said that with banks have the good management and know how to do the business well, in the context of difficulties, they still have many chances. – Source: Vietbiz24.com

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Oct 7 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry