This year, the total expected pre-tax profits of 26 banks, which have announced their business plans this year, were estimated at VND36.7 trillion (US$1.748 billion), rising 5.18 per cent as compared to last year.

The Viet Nam Joint Stock Bank for Industry and Trade (VietinBank) led in terms of pre-tax profit plan in 2014 with VND7.28 trillion (US$346.66 million), followed by Bank for Investment and Development of Viet Nam (BIDV) with VND6 trillion ($285.7 million).

At the shareholders meeting held last week, Viecombank chairman Nguyen Hoa Binh noted that his bank expected to gain a pre-tax profit of VND5.5 trillion ($261.9 million), besides setting aside VND5 trillion ($238 million) for risk provision.

Vietcombank also targeted its total assets to rise by 11 per cent against last year to VND520.6 trillion ($24.79 billion). The bank's lending and capital mobilisation are estimated to increase by 13 per cent to reach VND309.97 trillion ($14.76 billion) and VND384.49 trillion ($18.3 billion), respectively.

Military Bank (MBB) and Sai Gon Thuong Tin Bank (Sacombank) also aimed to gain pre-tax profit of VND3.1 trillion ($147.619 million) and VND3 trillion ($142.8 million), respectively in 2014.

Another notable name this year is the Viet Nam Prosperity Commercial JS Bank (VPBank) with a profit target of VND1.89 trillion against last year's VND1.35 trillion ($64.5 million), surpassing many other listed banks, including SHB and ACB. VPBank's total assets are also targeted to reach VND155 trillion ($7.38 billion) against VND121.26 trillion ($5.8 billion) of last year.

According to Vietcombank's Binh, although the domestic economy is forecast to improve, many difficulties and challenges still lay ahead. Therefore, his bank will still adopt a cautious approach with regard to its performance plans this year. He further pointed out that it has planned to set aside VND5 trillion ($238.1 million) for risk provision against VND3.5 trillion ($166.66 million) of last year. However, he remarked that Vietcombank's move towards the market will be also flexible.

Meanwhile, VPBank General Director Nguyen Duc Vinh explained that the banking system this year will undergo continuous restructuring. Therefore, he stated that profits and size cannot be the top priority, but greater emphasis should be laid on risk management and business model streamlining to prepare for a leap in the post-restructuring period.

By the end of the first quarter of this year, several indications have hinted at dismal improvements in the profits made by the banks. The unsatisfactory improvement has been attributed to the difficulties faced by the banks' biggest income source from credit activities amidst low credit growth.

Furthermore, due to the impact of the macroeconomic context, especially the real estate, this year, bad debts will continue to affect the profits of the banking sector, industry insiders have forecast.