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Top 7 listed banks in Vietnam 2022

Top 7 listed banks in Vietnam 2022

Thursday 25, 08 2022
In early August, Forbes announced the list of top 50 best listed companies in Vietnam in 2022, in which the banking industry has 7 representatives: Vietcombank, Vietinbank, BIDV, VIB, ACB, MB and TPBank.

Over the years, these 7 banks have built solid internal resources, established sustainable growth momentum, expanded capital scale, and maintained good performance indicators.

Below is proof of why the above mentioned banks are the best listed banks in Vietnam in 2022.

Large profit scale and strong growth in the past 5 years

In the past 5 years (from 2016 to 2021), the total profit before tax of these top 7 banks has tripled, from VND 30 trillion to VND 100 trillion. Vietcombank has continuously led in terms of profit scale for many years, while VIB has led in profit growth with a compound growth rate of 63%/year for 5 consecutive years.

Profit before tax in 2021

(Source: Fiinpro, Financial statements of banks)

Profit efficiency associated with retail growth trend

The average ROE (return on equity) of these top 7 listed banks is at 20%, more than double the average of 8%-10% of banks in the region. In particular, VIB is currently leading the banking system with a ROE of 30% and a retail lending portfolio of nearly 90%, followed by ACB.

Ratio of retail credit

(Source: Fiinpro, Financial statements of banks)

Retail banking is a general trend of the banking industry. In the past 5 years, the top 7 banks have all made certain transformations, reflected in the average retail growth rate of over 20%, while the industry's average credit growth is only 14%.

In particular, VIB experienced the most impressive growth rate with the retail growth rate in 5 years reaching 44%, nearly double the average of the other banks. Vietcombank maintained a growth rate of over 30%/year. In the next 5 to 10 years, retail banking will continue to be the main driving force of Vietnam's banking industry with many potentials and opportunities for growth, improved profitability and operational efficiency.

Strong shift in income structure to non-interest income sources

Fee income ratio

(Source: Fiinpro, Financial statements of banks)

The structure of income from service activities also saw a strong shift. Income from fees has grown rapidly over the past 5 years, accounting for a larger proportion in banks’ total income. Among the top 7 banks, VIB is currently the leading bank in terms of income from service activities as in the last 4 quarters, the proportion of income from services accounted for about 18% of the bank's total operating revenue. While the remaining banks have an average contribution rate from service revenue ranging from 11-12%.

Highest digital conversion rate

At the Banking Industry Digital Transformation Conference held on the morning of August 4, a representative of the State Bank of Vietnam said 90% of customer transactions of many banks are performed on digital channels, far ahead of the target of 70% by 2025 set in Decision 810.

6 out of 7 top listed banks have invested heavily in digital transformation for many years and are in the top rankings, with the rate of transactions via digital banks accounting for over 90% of the total transactions.

Dynamic growth in card services

Total international credit card

(Source: Card Association)

The top listed banks are also active in launching products and services with outstanding features for customers, especially the card market with many potentials.

Notably, VIB is associated with impressive card products that first appeared in Vietnam. Therefore, it is not surprising that this bank is currently leading in terms of total customer card spending. According to VIB, the bank is currently holding the top market share of Mastercard in Vietnam with more than 35%.

Developing insurance products through banking channels

Total new insurance premiums

(Source: Securities company analysis report)

In the segment of distribution of insurance products through banking channels, VIB, MB and ACB have always been in the top 3 during the past period with outstanding market shares. According to experts, the insurance distribution segment through banking channels in Vietnam will have a lot of potential for growth in the coming years with low penetration rate and good growth of quality customer base.

Safe credit portfolio, well-managed bad debt ratio

One of the highlights is that the top 7 banks all have high quality and safe credit portfolios with a bad debt ratio managed below 2%. Regarding credit costs, there are two banks that have controlled the cost below 1% for many years, VIB and ACB, compared to the market average at 1.5% - 2.0%.

Increasingly strong capital

CAR coefficient

(Source: Fiinpro, Investor Meeting Report, Securities Analysis Report (*) Figures for 2021)

Currently, the top listed banks have all applied Basel II standards with a CAR at a safe threshold higher than the minimum set by the State Bank of 8%. Four private commercial joint stock banks in this list including VIB, MB, ACB and TPBank all have CAR ratios of more than 11%. This will help banks create a solid foundation, ensuring sustainable development momentum in the future.

Source: Forbes, vietnambiz

Compiled by Vietnam Credit

 

Categories
Banking & Finance

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