As of July 20, three banks had officially announced their financial statements for the second quarter and a number of other banks such as Vietcombank, Agribank, MSB, TPBank or LPBank had revealed preliminary business results for the first half of the year.
In the context of the economy facing many difficulties, several banks recorded a decrease in profit in the second quarter compared to the same period last year and the bad debt ratio tended to go up during the period.
Bac A Bank, the first bank to announce its financial statements for the second quarter, recorded a pre-tax profit of VND 139 billion, down 25% compared to the same period last year. However, total pre-tax profit for the first 6 months still increased by 10% to VND 474 billion, thanks to the reduction of risk provision expenses by more than half.
The decline in profit was also recorded at Lien Viet Post Commercial Joint Stock as in the first 6 months, this bank's pre-tax profit reached VND 2,446 billion, down 31.8% over the same period in 2022. In the first quarter, the bank's pre-tax profit also decreased by 13% to VND 1,566 billion.
At TPBank, the profit before tax in the first 6 months of the year decreased by 10.3% over the same period to nearly VND 3,400 billion, fulfilling only 39% of the whole year business plan due to the influence of the general difficulties of the economy.
Meanwhile, PG Bank was the first bank to record profit growth in the second quarter and the first six months of the year.
Profit in the second quarter of the bank was more than VND 150 billion, up nearly 27% over the same period last year while non-interest income sources all decreased over the same period. This double-digit profit growth was driven by a sharp reduction in provision expenses (down 35%).
Another bank that also recorded profit growth was MSB with 6 months' consolidated pre-tax profit of VND3,548 billion, up 6% y/y, equivalent to 56% of the year plan. In particular, net profit from service activities increased by more than 86%, the ratio of non-interest income to total operating income reached over 31%.
At the Conference to review banking activities in the first 6 months of 2023 and implement tasks for the last 6 months of 2023 organized by the State Bank (SBV), the two giants Vietcombank and Agribank also revealed business results in the second quarter and the first 6 months of the year.
Mr. Nguyen Thanh Tung, General Director of Vietcombank, said that by the end of June, Vietcombank's capital mobilization and credit grew by 6.6% and 2.6%, respectively. The growth rate on scale is VND 1.3 million billion and VND 1.2 million billion, respectively.
The bank's credit quality was under control, the bad debt ratio was at 0.85%, the provision for bad debt was over 350%. Previously, SSI Research estimated Vietcombank's profit before tax in the second quarter would be about VND 10,000 - 10,300 billion (up 38% over the same period).
According to Mr. Pham Toan Vuong, Member of the Members' Council, General Director of Agribank, as of June 30, 2023, Agribank's total assets reached over VND 1.9 million billion; capital source reached over VND 1.75 million billion; outstanding loans to the economy reached over VND 1.46 million billion; the operating safety ratio was guaranteed according to regulations.
Clear differentiation among banks
In general, in the context of the gloomy economic situation, many experts predict that the profit of the banking industry will face difficulties and there will be clear differentiation.
Vietnam Joint Stock Commercial Bank for Foreign Trade Securities (VCBS) forecasts that pre-tax profits of the banking industry will decelerate in 2023, with a growth rate of about 10%, and there will be a divergence in profit prospects among banking groups.
VCBS believes that profits will continue to diversify sharply in 2024. Some small-sized banks will continue to decelerate, even grow negatively in 2024 when the real estate market and macro situation deteriorate, causing credit growth to slow down. Moreover, customers' ability to repay loans is difficult to recover, VCBS said.
SSI Research also believes that bank profits in the second quarter will have a strong differentiation. Specifically, for state-owned banks, experts believe that profits will continue to record growth in the second quarter.
In the group of large joint stock banks, profit growth is clearly differentiated. SSI forecasts that HDBank, Sacombank, VIB will record growth; MB's profit will be flat and the profit of ACB, Techcombank, TPBank may decrease.
Compiled by VietnamCredit