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Agribank’s pre-tax profit in 2020 reached nearly VND 13,000 billion

Agribank’s pre-tax profit in 2020 reached nearly VND 13,000 billion

Wednesday 20, 01 2021
Agribank recently announced preliminary business results in 2020 with a profit of nearly VND 13,000 billion, decreasing compared to the last year but still exceeding the plan for the whole year.

Specifically, by the end of December 2020, the total assets of Vietnam Bank for Agriculture and Rural Development (Agribank) had reached over VND 1.57 million billion. In which, the capital was estimated at more than VND 1.45 million billion.

Agribank

The credit growth of Agribank last year reached 8%, and the bad debt ratio was at 1.89%. At the same time, the total outstanding loans to the economy were over VND 1.21 million billion, of which the outstanding loans in the agricultural and rural sectors account for approximately 70% of the total outstanding loans.

Despite spending VND 5,500 billion of profit to reduce interest rates for people and businesses affected by the COVID-19 pandemic, Agribank still recorded a pre-tax profit of VND 12,869 billion in 2020. 

Despite being 9% lower than that in 2019, the bank's pre-tax profit this year still exceeded the target for the whole year. With this profit, Agribank currently has the third-highest pre-tax profit in the whole banking system, only behind the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) with more than VND 23,000 billion and VND 16,450 billion, respectively. 

Vietcombank & Vietinbank

In 2020, Agribank was honored with two prestigious awards “Outstanding bank for high-tech agricultural investment” and “Outstanding bank for the community”. These awards honor banks with outstanding performance regarding banking operations, banking products and services, and contributions to the industry and economy. 

Also, the bank was named as "Initiative for the community in 2020" for two projects: Promotion of development of card services in agricultural and rural markets and mobile transaction units using specialized vans. These two projects have helped to create favorable conditions for residents in rural and remote areas, allowed poor people with low income to access and use the banking and financial services, and eliminated black credit.

In 2020, according to Moody, Agribank’s long-term foreign-currency deposit rating was upgraded from B1 to Ba3, equivalent to Vietnam's rating. That was because Agribank had made outstanding progress in handling legacy problem assets, improved asset quality stability, remained capital mobilization and liquidity at a good level instead of being affected by market fluctuations.

Last year, Agribank reduced lending interest rates to customers seven times, four times of which are the reduction for priority areas and reduced service fees nine times.

Agribank

The bank also restructured debts for more than 14,000 customers with outstanding loans of over VND 33,000 billion; exempted or reduced interests of over VND 5,000 billion for over 1,400 customers; made new loans of nearly VND 120,000 billion to customers affected by the COVID-19 pandemic. 

As planned, the credit growth this whole year is expected to reach 8 - 11%. The pre-tax profit growth is set to reach about 10%, of which the revenue from services will increase by 6 - 8%.

However, to realize these objectives, the bank must increase its charter capital by VND 10,000 billion to ensure capital adequacy ratios, according to the bank's leaders. In June 2020, Agribank received approval to increase its charter capital by VND 3,500 billion but has not completed the administrative procedures yet. The bank's leaders also wanted to approve the equitization plan soon to improve financial capacity in the future.
 

Compiled by VietnamCredit

Categories
Banking & Finance

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