Citing uncertainties coming from fledgling economic reform and the ongoing European debt crisis, Tran Phuong Binh, director of Dong A Bank, told newswire Vnexpress that further difficulties would come this year.

In the meantime, the government's targets in 2012 are inflation mitigation and macro-economic stabilization.

As a result, interest rates and credit growth continue to be a puzzle for commercial banks this year, Binh said.

Therefore, capital increases would be Dong A Bank's first priority in an attempt to strengthen financial capacity and its leading position in banking technology, he added.

Also, the development of finance and banking largely depends on the central bank's policy, according to Trinh Van Tuan, general director of Phuong Dong Bank.

2012 is the first year of economic restructuring and banking reform in particular, which would pose tremendous difficulties for credit institutions, he said.

An expert, a member of the National Monetary Policy Committee, said administrative measures which have been applied to keep a lid on the capital mobilization rate are just situational moves.

However, given the current context, such tough regulation would be necessary in order to achieve important economic targets.

Therefore, commercial banks would continue encountering difficulties attracting dong deposits in 2012, he said.

Moreover, the cautious monetary policy has taken a toll on money supply and banks' liquidity.

Also, economic statistics in early 2012 have indicated inflation has been dropping significantly along with continuously low economic development, according to Australia-New Zealand Banking Group (ANZ).

Currently, the State Bank of Vietnam has expressed its intention to bring down interest rates, following the cooling of inflation.

Price impacts following the Tet holiday, however, should be evaluated carefully by the central bank, said ANZ.

According to the Asian macro-economic report quarter 1 2012 of HSBC's economic research unit, inflation at the end of this year is forecast to fall to a single-digit rate from about 18.6 percent as of last year.

Interest rates of 14% may therefore be lowered to 13% in Q1/2012 and then reduced to 9% by the year-end.

Despite the prediction of being a very tough year, many commercial banks are setting a high profit plan based on their optimistic view of the market.

Among top commercial banks, Vietinbank has announced that its pre-tax profit growth in 2012 was targeted to surge 20 percent against the year earlier, with total assets, total deposits, and total outstanding loans to rise 20 percent, 25 percent, and 20 percent respectively.

Reportedly, the lender posted the pre-tax profit of VND8.105 trillion, total assets of VND460.421 trillion, bad debt ratio of 0.74 percent on total outstanding loans, return on equity (ROE) at 25.4 percent, return on asset (ROA) at 1.96 percent, and a dividend payment of 20 percent in 2011.

Similarly, Vietnam Bank for Investment and Development (BIDV) has also planned to reach a pre-tax profit of VND5.8 trillion in 2012, increasing 30 percent year on year.

This year, BIDV's ROE target was raised from 13 percent of 2011 to 17 percent, total assets at VND50 trillion, up 17 percent year on year.

In addition, Dong A Bank has set the 2012 profit at VND1.650 trillion, an annual growth of 131.5 percent compared with 2010's actualized VND1.255 trillion. Its charter capital and total assets are planned to increase to VND6 trillion and VND100 trillion from VND4.5 trillion and VND64.56 trillion respectively in 2012.

Military Bank is also expected to gain a total assets growth rate of 22 percent and chartered capital increase of 64 percent in this year. Furthermore, MB targets to expand its network to 240 points.

Small-sized lender Kien Long Bank has also offered the quite impressive business plan for 2012 with a pre-tax profit of VND710 billion, a dividend rise of 30-40 percent compared with 2011. Last year the bank earned a pre-tax profit of VND522 billion, leaping 102 percent year on year.

Since the central bank said it may merge 5-8 banks, it will be a big chance for remaining banks in business in 2012, said Tran Phuong Binh of Dong A Bank.

But most of banks that set high business targets for 2012 are large ones, while small to medium sized banks seemed to keep their profit plan unannounced.