Agribank estimates half-year profit of about VND 5,000 billion
Although credit growth is low due to Covid-19 impact, Agribank estimates profit in the first half of this year lower than the same period and would reach over 40% of the plan.
It is estimated that profit of the first half of this year would reach over 40% of the plan and 35-40% lower than the same period, i.e. over VND 4,800 billion. In 2019, Agribank recorded a record increase of 90% in profit to over VND 14,110 billion.
As of the end of the first half of the year, Agribank's outstanding loans reached VND 1.13 million billion, an increase of only about 1% compared to the beginning of the year, lower than the 3.26% of the industry. To offset the decline in revenue from lending activities, Agribank will increase service revenues, control credit quality and limit risk provisioning to ensure profit targets.
Agribank’s 6-month credit growth was much lower than the same period due to the impact of Covid-19. Agribank has identified the last 6 months of the year as a "sprint" period for Agribank to meet the business targets of the whole year. However, the business results of the second half of the year depend heavily on macroeconomic developments, NPLs incurred due to Covid-19 led to an increase in risk provisioning.
In the first half of the year, Agribank has restructured the repayment periods, waived and reduced interest rates and fees under Circular 01 with a total outstanding loan of over VND 43,000 billion and implemented a VND 100,000 billion credit program with interest rates reduced from 0.5 % - 2.5% a year compared to the normal level.
In difficult economic conditions, the banking industry is facing the risk of increasing bad debts, therefore it is necessary to increase the provision. The debt restructuring measures also affect accrued income, therefor many banks also set the profit target of the year to be flat and lower than the same period.
As of June 30, 2020, Agribank had total assets of over VND 1.46 million billion; funding resources reached over VND 1.35 million billion; total outstanding loans and investments reached over VND 1.33 million billion; in which, the outstanding loans to the economy of over VND 1.135 million billion.
Agribank credit capital accounts for a large proportion of the total outstanding loans of nearly VND 2 million billion for agriculture and rural areas in Vietnam and accounts for over 50% of the total rural loans of the entire Vietnam banking system, making an important contribution to the development of Vietnam's agriculture in particular and the country's economy in general.
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