According to SSI Research, average pre-tax profit will grow from 9 to 11% compared to the same period in 2021. However, there is a clear differentiation among banks. State-owned banks will have a slower growth rate due to their large scale and high growth rate in 2021. Joint stock banks will experience a higher average growth rate, from 25-27%. There are even banks with 3-digit growth.
According to Yuanta Securities, the profit of 27 listed banks in the first quarter is expected to increase by 11% over the same period. Compared to the fourth quarter of 2021, the figure is 28% higher.
Notably, the difference is that every year, credit usually grows slowly at the beginning of the year, after Tet. However, this year, the opposite has happened. The huge capital demand in the beginning of the year has helped many banks make big profits from lending activities.
VPBank earned nearly VND 11,150 billion in pre-tax profit in the first quarter, nearly 3 times higher than the same period last year. This is the highest increase ever.
"Contribution from basic business activities increased by 65% and the rest came from support fee collection transactions and insurance contracts. The growth from basic operations came from growth of products and services, more than 10% of which is credit, twice as high as the industry average," shared Ms. Le Hoang Khanh An, Chief Financial Officer, VPBank.
In addition to credit, many banks also seek to diversify their revenue sources. VIB has earned more than VND 1,800 billion, up to 68%. In particular, revenue from service fees such as insurance or payment guarantee accounts for a relatively high proportion.
"VIB's non-credit fees are among the highest in the banking industry, especially fees from banca, bancassurance and non-credit fees from credit cards, which account for nearly 80% of service fees." Ms. Tran Thu Huong, Strategy Director cum Head of Retail Banking Division VIB, said.
SSI Research estimates that, in 12 out of 13 banks that have disclosed information, profit growth ranges from 14% to over 170%.
"Credit growth in the first quarter was quite high, above 5%, much higher than the same period in 2021. Banks maintained stable profit margins and handled bad debts quite well, so we estimate profits would increase by about 26%", said Mr. Pham Luu Hung, Chief Economist, SSI Securities Joint Stock Company.
Many banks are actively looking for ways to improve capacity and improve operational quality by, for example, seeking to meet higher capital adequacy standards according to basel 2 and basel 3. The most obvious way is the plan to increase charter capital.
Aiming to increase charter capital from over VND 9,400 billion to VND 10,400 billion this year, ABBank will spend capital to invest in technology infrastructure and improve operational efficiency.
A series of other banks are also planning to increase capital such as VPBank, Seabank, TCB..., mainly through the plan of paying dividends in shares, paying bonus shares or issuing additional shares to existing shareholders.
"The plan to increase capital of banks is stronger than in previous years through the form of selling capital to foreign investors or paying dividends in shares instead of in cash. The driving force behind the capital increase comes from the fact that banks' capital ratios themselves are relatively low, compared to banks in the region in the context that the risk of bad debt increases this year because the COVID-19 epidemic" said Nguyen Quoc Hung, General Secretary of the Vietnam Bankers Association.
As for state-owned banks, the State Bank has also allowed four banks to increase their capital to meet higher capital adequacy standards, at the same time created opportunities for banks to expand lending activities.