Bao Viet Holdings (HOSE: BVH) has posted its business results for the first half of the year. Viet Nam News spoke with Bao Viet General Director Nguyen Thi Phuc Lam about the group's results and strategy for the future.
Bao Viet posted double-digit growth for the first half of this year. Could you please tell us how your group achieved this growth in the face of challenging domestic and global economic conditions?
Despite challenging economic conditions in Viet Nam and the world in H1, Bao Viet Holdings' core business still achieved significant growth.
During the first six months, our consolidated revenue was more than VND7 trillion (US$333 million), surging by more than VND1.1 trillion or 19 per cent over the same period last year.
Revenue from Bao Viet's core insurance operations hit VND4.5 trillion ($214 million), a year-on-year increase of 12.4 per cent. Meanwhile, revenue from financial activities reached VND1.57 trillion ($75 million), up 12.7 per cent. The group's banking activities brought a revenue of VND799 billion ($38 million), up 110 per cent.
Consolidated pre-tax profit in the first six months hit VND665 billion ($32 million) representing 46 per cent of our annual target, but slightly down in comparison with the same period last year.
We achieved these results in a challenging environment by focusing on developing basic factors such as renewing management, investing in information and technology, boosting financial capacity, and developing new services in order to bring convenience and added value to our customers.
Our management board also reacted quickly and prudently in response to the fluctuating economic conditions.
For example, we cut back our investment in the stock market and poured money into fixed interest deposits.
You said that your group's profit was down over the same period last year. Why was profit down when revenue was up?
The main reason for this downturn was the stock market.
In the first six months, 62 out of our 105 securities companies and 27 out of our 47 investment funds reported losses, and 70 per cent of all listed firms fell below face value.
As regulated, Bao Viet has to spend money to ensure our subsidiaries stay afloat, and that's why our profit was down despite double-digit revenue growth.
What has Bao Viet done to hit this year's target in response to the difficult economic conditions?
Our group's revenue and profit tend to be higher in the second half of the year than in the first, so we believe that we will fulfil our annual targets in terms of revenue and dividend payout (Nearly VND1.5 trillion and 12 per cent).
We are also determined to implement key solutions in fields such as strengthening retail and developing both traditional services (Non-human insurance) and new products.
Bao Viet will also improve the quality of distribution systems as well as risk management.
In the last months of this year, we will continue to focus on developing "One Bao Viet - One New Foundation", with the main aim of establishing a strong basis for the future.
Bao Viet has issued two financial statements: One in line with Viet Nam Accounting System (VAS) regulations, and another adhering to International Financial Reporting Standards (IFRS). Why is this?
Bao Viet applied these two systems with the main aim of approaching international standards in every field including the financial and accounting sectors.
Moreover, with these two projects, we hope to improve transparency in our reports.
These statements allow users to compare the group's financial performance with other financial institutions in the region, and give a general overview of company operations.
We hope that the IFRS will help us to meet international standards so that we can expand our business into the world market.
Foreign companies have started to gain a foothold in the Vietnamese insurance market. What do you think are the advantages of domestic companies compared with foreign rivals?
Domestic companies have a lot of experience in the Vietnamese market. They have been established for a long time and are well known among consumers.
They are also familiar with the habits and behaviour of Vietnamese people.
However, to cope with the competition, domestic companies must restructure and develop human resources in order to stay ahead of the game.