According to Vietnam Country Report 2021 by VietnamCredit, banking is among five promising business sectors in Vietnam in 2021 (along with real estate industry, steel industry, e-commerce industry and logistics industry).
In 2020, the banking industry still experienced positive growth and exceeded their set targets despite the impact of the Covid-19 epidemic. In particular, the financial statements for the fourth quarter of 2020 of 27 banks showed a profit increase of 13.7% compared to 2019.
Positive profits in the banking sector in 2020 were resulted from the reduction of revenue from the lending segment, the increase in income from non-credit activities including bancassurance, digital banking, foreign currency trading and online payment services, flexible operating costs, especially the reduction of provisioning in accordance with Circular 01/NHNN. Most importantly, that the decline in lending interest rates was not in line with the deposit interest rate led to a great improvement in net profit margin of the listed banks in Q2/2020.
VietnamCredit forecasts that the after-tax profit of the banking sector may reach 16% in 2021, demonstrating the great potential of this industry. However, the profitability of banks can be affected if Circular 01/NHNN is amended, which requires banks to make provisions for a maximum of 3 years instead of not having to make the provision as previously.
Below is the annual Vietnamese bank ranking made by VietnamCredit’s experts based on financial indicators of banks including gross profit margin (GPM), total assets, and owner's equity, and other non-financial indicators including reputation and their positions in the banking system.
Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) was established on April 1, 1963. It was formerly known as the Foreign Exchange Department (under the State Bank of Vietnam). This is the first unit to be selected by the Government to pilot equitization in the banking sector. On June 2, 2008, Vietcombank officially operated as a joint stock commercial bank. On June 30, 2009, Vietcombank shares (VCB) were officially listed on the stock exchange.
After more than half a century of operation, Vietcombank is now one of the largest commercial banks in Vietnam. It currently has more than 560 domestic and foreign branches, transaction offices and representative offices.
In 2020, Vietcombank's business activities were still effective despite the difficulties caused by the Covid-19 pandemic. Total assets of this bank exceeded VND 1.3 million billion, an increase of 8.5% compared to 2019 while its consolidated profit reached over VND 23 trillion (about 1 billion USD), equivalent to 2019. This helps Vietcombank continue to hold the top position as the most effective bank in Vietnam. It is also the only Vietnamese bank in the list of 200 banks with the largest profit scale in the world.
VietinBank officially came into operation on March 26, 1988 after being separated from the State Bank of Vietnam. Currently, VietinBank has 100,000 branches and transaction offices. As of December 31, 2018 its charter capital was 37,234,045,560,000 VND.
VietinBank's business results in 2020 both met and exceeded the planned targets. Non-interest income increased by 35.2% compared to 2019 while profit from capital business increased by 70% compared to 2019, and NPL ratio was less than 1%.
The bank’s individual profit before tax reached VND 16,450 billion. Profitability ratios (ROE and ROA) were 16.8% and 1.3%, respectively, which is a strong improvement compared to 2019.
Vietnam Technological and Commercial Joint Stock Bank was established in 1993 with the chartered capital of VND 20 billion. Techcombank's head office is located at 191 Ba Trieu Street, Hanoi.
In 2020, Techcombank's pre-tax profit reached VND 15.8 trillion and revenue reached VND 27 trillion, up 23.1% and 28.4%, respectively, over the same period in 2019. This bank also continued to lead the Vietnamese banking system in terms of current account saving account (CASA) with 46.1% and return on assets (ROA) with 3.1%.
Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) was established on April 26, 1957 under the name Bank for Construction of Vietnam. Through many changes, on May 1, 2012, BIDV was successfully equitized, officially transformed into Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).
As of December 31, 2020, BIDV's total assets had reached VND 1.49 million billion, an average growth of 10.4% per year during the period 2016-2020.
In 2020, the profit before tax of this bank’s commercial segment reached VND 8,515 billion while its consolidated pre-tax profit was VND 9,017 billion. Profit in 2020 decreased compared to 2019 because BIDV reduced its income by more than VND 6,400 billion to implement debt restructuring, lower interest rates and exempt interest and fees to support businesses and people.
Military Joint Stock Commercial Bank (MBBank) is an enterprise directly under the Ministry of National Defense established in 1994. The bank's charter capital is VND 21,605 trillion.
In 2020, MB's profit reached VND 10,688 billion, an increase of 6% compared to 2019 and exceeding 24% of the year plan thanks to impressive growth in all business activities.
By the end of 2020, the total assets of MB had reached nearly VND 495 trillion, up 20% compared to the beginning of the year. During the year, customer deposits increased 14% to VND 310,960 billion, and issuance of valuable papers increased by 94% to VND 50,923 billion.
As of December 31, 2020, MB's non-performing loans had decreased, but the absolute value of NPLs increased by 12% to VND 3,248 billion. In particular, NPL coverage ratio was at 134%.
Vietnam Prosperity Joint Stock Commercial Bank was established on August 12, 1993. After nearly 30 years of operation, VPBank has increased its charter capital to VND 25,299,679,660,000.
According to the financial statement for 2020, the total assets of this bank reached more than VND 419 trillion, an increase of more than 11% compared to 2019. Total consolidated outstanding loans to customers reached more than VND 320 trillion, an increase of 19%.
VPBank's risk management is quite effective as its NPLs were well controlled, reaching only 2.9% at the end of 2020.
Despite the negative impacts of the COVID-19 pandemic, VPBank's 2020 consolidated revenue reached more than VND39 trillion, up 7.4%. Consolidated pre-tax profit reached more than VND13 trillion, reaching 127.5% of the plan set out at the beginning of the year and increasing by more than 26% compared to 2019.
Agribank was established on March 26, 1988. At first, the bank was named Vietnam Agricultural Development Bank. At the end of 1990, the bank was renamed to Agricultural Bank of Vietnam. In 1996, it was renamed to Vietnam Bank For Agriculture and Rural Development.
In 2020, Agribank's total assets reached over VND 1.57 million billion. Agribank’s credit growth rate increased by 7.8% while net interest income reached VND 43,660 billion, the highest in the banking system.
For the whole year, Agribank's pre-tax profit reached VND 13,203 billion, down 5.5% compared to the previous year.
Asia Commercial Joint Stock Bank (ACB), officially went into operation on June 4, 1993.
In 2020, ACB's pre-tax profit reached VND 9,596 billion, an increase of 27.7% compared to 2019. Many business segments of this bank experienced sudden profit growth, including: profit from trading securities increased by 121%, reaching VND 166 billion; profit from buying and selling investment securities increased 13.5 times to VND 732 billion; and profit from foreign exchange business increased by 60% to VND 687 billion.
As of December 31, 2020, ACB's total assets reached VND 441,530 billion, an increase of 15.1% compared to the end of 2019. The bank’s NPLs were VND 1,840 billion, up 27% compared to the beginning of the year. The ratio of bad debt to outstanding loans increased from 0.54% to 0.6%.
TPBank was established on May 5, 2008 by key shareholders including DOJI Jewelry Group Joint Stock Company, FPT Joint Stock Company, International Finance Company, Vietnam Reinsurance Corporation, and SBI Ven Holding Pte. Ltd., Singapore.
In 2020, the bank's total assets reached VND 206,316 billion, up 24.47% compared to 2019 and exceeding 14% of the year plan. Total deposits reached VND 184,953 billion, up 25.15% over the previous year, while outstanding loans also had a good growth. TPBank's total operating income in 2020 was recorded at VND 10,368 billion, up 22.4% compared to 2019.
Saigon - Hanoi Commercial Joint Stock Bank (SHB), formerly known as Nhon Ai Rural Commercial Joint Stock Bank, was established on November 13, 1993 in Can Tho. In 2006, Nhon Ai Rural Commercial Joint Stock Bank was transformed into Urban Commercial Joint Stock Bank and renamed Saigon - Hanoi Commercial Joint Stock Bank (SHB).
By the end of 2020, SHB's total assets reached VND 412.9 trillion, an increase of 13.1% compared to the end of 2019. Its owners equity reached VND 24,393 billion while charter capital was VND 17,558 billion.
The profit before tax of SHB in 2020 reached VND 3,412 billion, completing 104% of the year plan and increasing 12.8% compared to the previous year. Return on equity (ROE) reached 15.9% while NIM reached 2.8%, up 0.8% compared to 2019.