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A glance at bank profits in 2023

A glance at bank profits in 2023

Wednesday 10, 01 2024
There are currently 7 banks announcing their business results for 2023, among which, the three giants in the Big4 group including Vietcombank, BIDV and Agribank recorded profits exceeding the 1 billion USD. 2023 is a challenging year for the banking industry when credit growth was low, capital flow was "stagnant" while asset quality declined, and bad debt increased.

A weak economy and frozen real estate market and corporate bonds have significantly affected the business situation of banks. In addition, banks also participated in reducing lending and mobilization interest rates to support the economy, causing net interest margin (NIM) to narrow, affecting profitability.

However, many banks still recorded positive results and reached the target of profit, capital mobilization, credit. More specifically, in 2023, in addition to Vietcombank, two other giants also recorded billion dollars in profit.

Big4 giants with billions of dollars in profit

On January 6, three state-owned commercial banks, Vietcombank, VietinBank and BIDV, all held a conference to summarize 2023 and deploy goals for 2024.

In particular, Vietcombank revealed that its pre-tax profit increased by 10.2% over the same period, completing 100.3% of the plan. In particular, Vietcombank's interest income increased by 0.4% over the same period, while non-interest income decreased by 4.6%. Off-balance sheet debt collection during the year reached 2,088 billion VND.

From the above figure, it can be estimated that Vietcombank's individual pre-tax profit in 2023 would be more than 40,400 billion VND. With these results, it is likely that Vietcombank will continue to maintain the title of profit champion in the banking industry.

Vietcombank's capital mobilization in market reached 1.41 million billion VND, an increase of 12.1% compared to 2022. The average proportion of current account savings account (CASA) reached 29.8% while the average non-term capital size decreased by 3.6% compared to the end of 2022. Vietcombank's outstanding credit balance was at 1.27 million billion VND, an increase of 10.6% during the year.

The bank also said that the debt ratio of group 2 was at 0.42% and bad debt (from group 3 to group 5) was at 0.97%. The NPL provision ratio reached 185%.

BIDV ranked second with individual pre-tax profit in 2023 reaching 26,750 billion VND, and consolidated pre-tax profit reaching over 27,400 billion VND. Compared to the same period last year, the bank's individual profit increased by 18.6%, and consolidated profit increased by 18.8%.

At the end of 2023, BIDV's total assets reached 2.26 billion VND, continuing to be the joint stock commercial bank with the largest asset scale in Vietnam. Capital mobilization reached 1.89 million billion VND, an increase of 16.5% compared to the end of 2022.

Its outstanding credit balance was at 1.75 million billion VND, an increase of 16.66%. This result is higher than the average of the entire economy (13.5%) as well as leading among the Big4 group. BIDV also revealed that the NPL ratio was at 1.1%, while the loan loss rate reached 192%.

Big4 giants with billions of dollars in profit

Meanwhile, VietinBank is likely to finish last in the Big4 group in terms of profits. At the Summary Conference, Chairman of the Board of Directors (BOD) of VietinBank Tran Minh Binh said that the bank has completed its profit plan for 2023.

In October, the bank's Board of Directors announced the 2023 plan with a separate profit before tax of 22,500 billion VND, an increase of 10.5% compared to the previous year (20,352 billion VND) and a NPL ratio of less than 1.8%.

At the end of 2023, VietinBank's total outstanding credit balance reached more than 1.5 million billion VND, an increase of 15% compared to 2022 and ranked second in the Big4. VietinBank's capital mobilization increased by 13.7%, of which CASA grew by 27%.

At the same time, VietinBank's NPL ratio was at 1.15%, down 0.09 percentage points compared to the end of 2024. Its loan loss rate (LLR) was at 160%.

Previously, Agribank also posted some information about the business situation in 2023.

Specifically, the bank estimated that pre-tax profit for the whole year would reach about 25,300 - 25,400 billion VND, an increase of 14.5 - 15% compared to the previous year. This figure is lower than the target the bank set at the end of May 2023 (26,200 billion VND).

Agribank's total assets exceeded the 2 million billion VND mark, with capital reaching over 1.88 million billion VND. Total outstanding loans to the economy reached over 1.55 million billion VND, growing by 7.4%. In addition, the bank's bad debt ratio was controlled below 2%.

Many joint stock banks have reached the finish line

Before the giants announced their business results, many joint stock banks had also revealed their profit estimates for the whole year 2023.

In particular, Sacombank forecast consolidated pre-tax profit to reach 9,500 billion VND, up 50% over the previous year and reaching 100% of the plan assigned by the General Meeting of Shareholders. The NPL ratio was controlled at 2%.

By the end of 2023, total assets of the bank were estimated to reach nearly 664,000 billion VND, of which profitable assets accounted for 90.3%. Total mobilization was estimated at more than 574,000 billion VND, while loans were estimated at more than 487,000 billion VND.

Operational safety ratios and financial indicators were balanced between safety and efficiency goals: CAR ratio was estimated at 9.45%, LDR ratio was estimated at 83%, NIM ratio was estimated at 3.88%. ROA and ROE indicators were estimated at 1.21% and 18.03%, respectively, an increase of 0.3 and 4.2%.

Many joint stock banks have reached the finish line

In the document asking for shareholders' opinions on dividend distribution, VIB said that according to the financial model and feasible forecast, the bank's full year profit after tax would reach VND 8,640 billion.

With a tax rate of 20% applied to credit institutions, VIB's pre-tax profit can be estimated at 10,800 billion VND.

This result is nearly equivalent to the forecast that bank leaders made in the investor meeting in October but lower than the target of 12,200 billion VND set in the 2023 General Meeting of Shareholders. Compared with last year's results, the profit after tax target for the whole year increased slightly, while fourth quarter’s profit decreased.

On December 22, in the Summary Conference, PVcomBank also said that \ the bank's revenue was estimated to reach 129% of the assigned plan, pre-tax profit was estimated to reach 100% of the plan, the minimum capital adequacy ratio was greater than 8 %.

According to the 2023 plan, PVcombank targeted parent bank revenue to reach 15,025 billion VND and pre-tax profit of 80 billion VND. With the consolidated bank, the planned revenue is 15,559 billion VND and pre-tax profit is 109 billion VND.

Source: vietnambiz

Compiled by VietnamCredit

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Banking & Finance

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