Bank profits in the third quarter still grew impressively

VCN - Although in the middle of 2022, banks had to face limited credit growth room, the business results in the third quarter of banks were still satisfactory, with a positive forecast for the whole year.
Two Two "giants" pulled the growth of bank profits in the first quarter of 2022
Will bank profits continue to prosper in 2022? Will bank profits continue to prosper in 2022?
General Secretary of the Banking Association Nguyen Quoc Hung: Bank profits need to be understood correctly, objectively and comprehensively General Secretary of the Banking Association Nguyen Quoc Hung: Bank profits need to be understood correctly, objectively and comprehensively
Bank profits in the third quarter still grew impressively
Vietcombank has risen to regain the top position from VPBank

Double-digit growth in profit

Currently, a number of banks have started to announce business results for the first nine months of 2022, in which, many banks recorded double-digit growth compared to the same period last year.

For example, TPBank announced 9 months of 2022 business results with accumulated pre-tax profit of VND5,926 billion, up 35% over the same period last year and fulfilled 72% of the full-year profit plan.

At a meeting with leaders of commercial banks on October 16, Prime Minister Pham Minh Chinh asked banks to make efforts to reduce costs, share difficulties with the country, accompany people and enterprises to overcome difficulties. The Prime Minister suggested commercial banks comply with the law, strengthen governance, administration, and financial capacity, and ensure operational safety.

VIB also announced preliminary business results with 9 months' pre-tax profit of VND7,800 billion, up 46% over the same period last year. Sacombank recorded a profit in the third quarter of 2022 reaching VND1,532 billion, up 86% over the same period last year. Accumulated in the first 9 months of the year, pre-tax profit reached VND4,440 billion, completing 84.1% of the plan, of which the proportion of non-interest income was 39.4%.

SSI Securities Analysis Center (SSI Research) has just reported estimated business results in the third quarter of 2022 of 26 listed companies in the research scope. SSI's analysis team forecasted that banking group profits would still grow strongly in the third quarter despite rising interest rates putting pressure on net interest margin (NIM).

Specifically, SSI Research forecasted that Vietcombank's profit in the third quarter of 2022 would reach VND7,400-7,600 billion, up 29-33% over the same period due to the growth of credit outstanding and deposit balance; BIDV reached about VND6,000 billion, up 120%. Techcombank's pre-tax profit increased by about 20-25% despite the pressure of increasing capital costs and less diversified income sources compared to previous periods.

SSI believed that VPBank could record a pre-tax profit of VND4,200-4,500 billion in the third quarter of 2022, up 55-65% over the same period last year. VPBank's growth was driven by the improved NIM of the parent bank and controlled credit quality. SSI Research expected MB's 9-month pre-tax profit to reach about VND18,000-18,500 billion, an increase of 50-60% over the same period.

The results of the survey on business trends in the fourth quarter of 2022 of credit institutions conducted by the Department of Forecasting and Statistics (the State Bank of Vietnam) showed that most banks still expected profits to improve in this year.

Accordingly, 70.4-75.9% of credit institutions expected their business to improve in the fourth quarter of 2022. Profit pre-tax in 2022 was expected to grow positively by 88.3% of credit institutions compared to 2021.

Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banks Association said that, through discussions with leaders of credit institutions, the performance results of the third quarter of 2022 were good. According to Mr. Hung, this was a good sign in the context that deposit interest rates had increased since the beginning of the third quarter while lending rates had barely adjusted and the increase was not much compared to the growth rate of deposit rates. The reason was that banks expanded many other service activities, contributing to the growth of profits.

He also analyzed, according to the data of the State Bank, as of June 30, 2022, the total assets of the entire system of credit institutions reached VND17 quadrillion and the outstanding credit balance reached over VND12 quadrillion. Therefore, the current profit rate of credit institutions was normal, not sudden.

Are interest rates hindering growth?

Despite the positive growth in the past 9 months, according to experts, the profit of the banking industry in 2022 and 2023 will be difficult to maintain high growth like in the period of 2020 and 2021.

The reason is room of credit growth is not much when credit will still aim to increase 14%/year.

Meanwhile, NIM is under pressure because input interest rates tend to increase, but lending interest rates are difficult to increase accordingly. Moreover, from the beginning of October this year, the reduction of the ceiling on the ratio of short-term capital for medium and long-term loans from 37% to 34% may also increase the cost of capital of banks because of the need to increase long-term deposits making higher capital costs.

In addition, from the second quarter of 2022, the current account savings account ratio (CASA) at many banks decreased because the cash flow from the current account tends to switch to the term savings channel to enjoy high interest rates, because investment channels such as securities and real estate slowed down. This may cause banks' net interest income to shrink, which is the main source of profits impacted. Moreover, a large amount of capital of banks is "stuck" in bad debt, including restructuring debt, making a large amount of credit unable to be brought to the economy.

Therefore, the advantage for growth is in favor of banks that have been granted additional credit room in the last period, along with that, banks promoted non-interest income sources. According to a report by Agribank Securities Company (Agriseco Research), to achieve the plan set out at the beginning of the year, banks might have their own solutions such as restructuring credit capital (accelerating capital turnover, increase debt collection) and increasing non-interest income. The retail focus will continue to be the spearhead in 2022 to help banks reduce risks. The insurance cross-selling market is forecast to continue to be active and is an important driver in speeding up banks' profitability.

At the same time, banks that have gone ahead and boldly digitized have better business results than banks that have not invested in digitization.

According to Mr. Nguyen Quoc Hung, with the promotion of digitization, some banks recorded a CASA rate of up to 40-50%. Such a high ratio would create financial strength for credit institutions and guarantee profits.

By Huong Diu/ Binh Minh

Related News

A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.
How does the Fed

How does the Fed's interest rate cut affect Vietnam?

VCN - In the latest meeting of the Federal Open Market Committee (FOMC), the Fed decided to cut interest rates by 50 basis points to a range of 4.75%-5%. Analysts have given different perspectives on this decision.
Non-life insurance market continues to grow

Non-life insurance market continues to grow

VCN - Non-life insurance achieved many positive results after the first half of 2024, creating an important foundation to soon complete the 2024 full-year target.

Latest News

Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.

More News

Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Exchange rate fluctuations bring huge profits to many banks

Exchange rate fluctuations bring huge profits to many banks

Net profits from the foreign exchange trading segment of many banks have gained positive results thanks to a strong USD/VNĐ exchange rate fluctuations this year.
Many challenges in restructuring public finance

Many challenges in restructuring public finance

VCN - Restructuring public finance is an important step to improve state financial management, ensure resources are allocated reasonably and effectively, contributing to the country's sustainable development. In addition to the achieved results, the process of accelerating public finance restructuring also faces many pressures.
Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

VCN - E-commerce platforms that declare and pay taxes on behalf of traders not only help to reduce the number of tax declaration points but also reduce the cost of compliance with administrative procedures for the whole society because only one point as the e-commerce trading platform implements tax deduction, payment and declaration on behalf of tens, hundreds of thousands of individuals and business households on the platform.
Disbursement of public investment must be accelerated: Deputy PM

Disbursement of public investment must be accelerated: Deputy PM

Deputy Prime Minister Ho Duc Phoc has called on ministries, agencies, and localities to accelerate the disbursement of public investment from now until the year-end and further tighten investment management.
HCMC: Domestic revenue rises, revenue from import-export activities begins to increase

HCMC: Domestic revenue rises, revenue from import-export activities begins to increase

VCN - The results of State budget revenue in HCMC in the first 10 months of 2024 are estimated to increase by 10% over the same period last year, of which the highlight is that revenue from import-export activities has begun to increase.
Read More

Your care

Latest Most read
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN - According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government'
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
Mobile Version