The commission’s report showed that the institutions earned a combined profit of VND47 trillion (US$2.07 billion) in the period.
Operating profits from lending activities increased 15.8 percent and profits before provisions for credit risks grew 30.2 percent in the nine-month period from a year earlier.
The net interest margin (NIM), a measure of profitability, improved slightly to 2.8 percent from 2.7 percent in the comparable period in 2016, it added.

Profits from lending activities of commercial banks increased 15.8 percent in the first nine months.

Total outstanding loans in the local banking system expanded 11.5 percent between January and September. Of the sum, lending in the Vietnamese dong accounted for 91.65 percent. Notably, credit in foreign currency rose 12.9 percent year-on-year, compared to a 5.4 percent increase a year earlier.
The commission added that the bad debt ratio has climbed to 2.9 percent currently, compared to 2.6 percent in 2016, with the majority lying at weak and poorly-managed banks.
In the first seven months of this year, banks resolved an estimated VND45 trillion ($1.98 billion) worth of non-performing loans. One third of the amount came from clients’ payment, one third was through sales of trouble loans to the Vietnam Asset Management Company, and the rest through provisions for credit risks and foreclosure of mortgage.
Local banks also set aside around VND110 trillion ($4.84 billion) for reserve fund to handle bad debts, up 22 percent from end-2016, the commission said.
As for the rest months of the year, most commercial banks expected their business performance to accelerate in Q4, helping the average pre-tax profit of the entire banking system rise 13.63 per cent in 2017, according to the latest survey on the business performance trend of credit institutions conducted by the State Bank of Vietnam.
As per the survey, 89 per cent of credit institutions estimated their growth this year to be positive in comparison with last year.
A total of 70.65 per cent of credit institutions continued to be optimistic about the trend of increasing demand for financial and banking services in 2017, especially demand for loans in the fourth quarter of 2017.
Economist Le Xuan Nghia said Vietnam’s banking industry in 2017 has witnessed a spectacular recovery, following a period of significant efforts towards dealing with bad debt, especially the risk provision. Compared with the most difficult period, commercial banks’ profitability has nearly doubled. This is the most important sign proving that commercial banks’ financial potential has recovered quite impressively, he said.