Bank profits in the first half of the year: Where growth is more than 60%, where there is a sharp decrease of nearly 90%

Chart: H.D

According to a survey by a reporter of Customs News, in general, the total profit of 26 banks listed on the stock exchange that announced financial statements decreased by more than 3% compared to the same period last year, but if we consider each bank separately Banks have a strong differentiation, large banks still maintain more stability than small and medium sized banks.

Accordingly, Vietcombank continued to maintain its growth momentum and ranked first with a pre-tax profit of nearly VND 20,500 billion, up 18% over the same period last year. In second place is BIDV with more than VND 13,860 billion, up 26% over the same period in 2022, helping this bank rise from the 6th position of the same period in 2022.

Meanwhile, in the opposite direction, VPBank has dropped from the runner-up position in the first half of 2022 to the 10th position in the first six months of 2023. The reason is that the bank's pre-tax profit in the first half of this year reached more than 10. VND 5,162 billion, a sharp decrease of more than 66% compared to VND 15,323 billion of the same period last year. VPBank's profit dropped sharply compared to the same period last year mainly because there was no abnormal income from AIA's prepaid insurance premiums like last year while increasing provision for risks.

Techcombank's profit also decreased by more than 20% from VND 14,106 billion in the first 6 months of 2022 to more than VND 11,270 billion in the first 6 months of 2023, making this bank from 3rd to 5th place in the profit ranking.

At the recent investor meeting, Phung Quang Hung, Deputy General Director and Director of Techcombank's corporate banking division, said that the difficult business environment has affected some of the bank's revenue streams. High interest rates lead to shrinking profit margins (NIM). In addition, the increase in provision expenses along with credit growth and a slight increase in bad debt ratio also affected the bank's profit. However, a representative of Techcombank still affirmed that the influence of the market made business results worse, but "resistance" continued to be confirmed, reflected in the stock price in the market.

Chart: H.D

Among banks, if calculated according to the growth rate of 6 months of 2023 compared to the same period in 2022, Sacombank has the highest rate, up to 63.5%; ranked second is OCB with an increase of more than 47%; NamABank also increased strongly by more than 30%...

In the opposite direction, BVBank's pre-tax profit dropped sharply by 88.7% from VND 355 billion in the same period in 2022 to VND 40 billion in the first half of this year. The management of BVBank explained that the bank has continuously reduced lending interest rates to accompany customers in difficulty, so although interest income still increased correspondingly, the cost of input capital increased, leading to net interest income decline. Moreover, the bank is continuing to invest in expanding its network, brand, and resources, leading to an increase in operating costs. Provision expense for credit risks in the first 6 months of BVBank increased by 59% over the same period was also the cause of lower profit.

The next largest decline in growth rate was VPBank with a decrease of more than 66%, ABBank also decreased sharply by more than 59%, LPBank decreased by 31.8%, SeABank decreased by 28.2%...

Chart: H.D

The bank with the lowest profit was NCB when it recorded 14 billion dong of profit after tax. Although it decreased compared to the same period last year, according to the representative of NCB, the results from the main business activities, although not significantly increased compared to the same period of the same period last year, still achieved the target and demonstrated NCB's efforts in the context of the economy is still facing many difficulties, negatively affecting the production and business activities of individual and corporate customers. Moreover, many business indicators have shown positive signals thanks to proactive and flexible adaptation, investment in modern technology platform, etc.

The business results of banks in the first two quarters of 2023 are quite dismal, which is attributed to a number of consequences from the recent adverse developments of the real estate market and the very high demand for loans for production and business due to weak consumer demand. Experts believe that in the last months of the year, there will be a divergence in profit prospects among banking groups and this divergence will continue to be stronger in 2024. In which, a number of small-sized banks will continue to decelerate, even negative growth before the effects of bad debt and economic difficulties persist; but banks with strong buffers still retain growth momentum.

In the recently released banking industry report, experts of SSI Securities Company expressed confidence with the forecast for 2023 of state-owned commercial banks and banks ACB, MB, and Techcombank. However, forecasts will be updated at some banks due to a sharper decrease in profit margin (NIM) than expected (VPBank), higher rate of bad debt formation than expected (TPBank, HDBank), operating Consumer finance was weaker than expected (VPBank) or non-interest income increased strongly (OCB, MSB).