Hanoi (VNS/VNA) - Most bankswill not officially set their annual targets until their shareholder meetingsin April, but many bank leaders are optimistic about 2019 with plansto increase profits through cutting operating costs and promoting digitalservices.

Vietcombank has already set a 2019 pre-taxprofit growth rate of 12 percent to over 20 trillion VND (855 million USD),while HDBank expects its pre-tax profit this year to rise by over 26 percentagainst 2018 to nearly 5.1 trillion VND.

Nguyen Dinh Thang, Chairman of Lien Viet PostBank, expected with numerous major trade agreements that Vietnam has signed andare gradually taking effect, foreign capital would continue to flow strongly,facilitating domestic production and business activities.

Thang also expected major trade conflicts in theworld would likely cool in 2019. Thang said that in 2019, if businesses andbanks grasped their opportunities, the prospects for production and businesswould be better than 2018.

Nguyen Le Quoc Anh, General Director ofTechcombank, expressed his optimism about 2019, saying even in the context ofglobal fluctuations witnessed last year, Vietnam still achieved high GDP growthwhile internal factors and the resistance of the economy remained strong.

In 2019, when the central bank will continuetightening credit growth, banks plan to focus on reducing cost-to-income ratio(CIR) and promoting digital banking services.

After stepping through a peak period ofinvestment to expand networks and workforces in the past two years, which hascaused CIR to remain high, banks expect to gain from the investment in 2019.

Techcombank, VP Bank, TPBank and VIB havealready managed to lower their CIR.

According to Do Minh Phu, Chairman of TPBank,digital banking would play a major role in reducing operating costs andincreasing the efficiency of CIR, contributing to improve profits this year.

Phu analysed that the biggest costs in bankingoperations were the costs of network investment and development, along with thecosts for personnel, which could be solved by the application of digitalbanking. Attracting customers to non-credit services and service fee collectionwas also becoming an increasing trend.

Sharing the same view, Nghiem Xuan Thanh, Chairmanof Vietcombank, said that 2019 would be the year of digital banking. In thepast three years, Vietcombank had focused on investment and implementation of anew core banking system to boost service development and shift the revenuestructure instead of relying heavily on credit.

Developing digital banking combined with retailbanking in a potential market of 95 million people with a high percentage ofyoung people means commercial banks were quickly accumulating a customer baseand large payment needs, Thanh said.

The focus on digital banking combined withretail banking has also helped some banks, Vietcombank, Techcombank and HDBank,to increase their number of individual customers rapidly in recent years, whichhas also contributed to raising the banks’ current account savings accounts(CASA) significantly. 

Reports showed some banks last year raised CASAto 28-30 percent in the total structure of deposits. The large proportion oflow-interest rate deposits has helped banks reduce mobilisation and operatingcosts, increasing profits and improving marginal interest in lending.-VNS/VNA