VCN - In 2023, credit institutions are more cautious with the business situation, and many forecasts raise concerns that profit growth will decelerate.
|2.8% of credit institutions expect negative profit growth and 1.9% expect profit to be unchanged in 2023.|
Many banks are expected to achieve high profits in 2022, however, in 2023, the profit breakthrough will face more obstacles, maybe even decelerate.
Experts at VNDirect Securities said that when the capital cost of the banking industry will increase sharply, the net profit margin (NIM) of banks will also narrow. Profit growth of the banking industry will decelerate in 2023, forecast to reach 10-11% in 2023-2024 (compared to 32% in 2022).
In the recent 2023 market outlook report, Viet Rong Securities Company (VDSC) said that in 2023 capital costs will increase, but the rate of interest-earning assets may increase more slowly, along with lending a three to six-month re-pricing delay leads to a slight narrowing of NIM in the next one or two quarters. State-owned banks will see a larger decline in NIM than joint stock commercial banks because of their mission to support the economy in difficult times.
Currently, a few banks have made business forecasts for 2023. At the conference to summarize 2022 and deploy tasks in 2023, leaders of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) said, the world and domestic economies are forecast to continue to face many difficulties, so in 2023, the bank aims to increase total assets by 9% compared to 2022, profit by at least 12%, credit growth by 12.8% compared to 2022.
Especially, in 2023, Vietcombank will complete the construction of a plan to receive a compulsory transfer of a weak credit institution.
In a recent announcement, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) said that in 2023, BIDV set a credit target to increase 12-13%; mobilizing operating capital in line with capital use, ensuring safety and efficiency, is expected to increase by 11%; controlling bad debt ratio according to Circular 11 at ≤1.4%.
According to the Resolution of the Board of Directors on the business plan in 2023 to submit to the General Meeting of Shareholders for approval, Vietnam Import-Export Commercial Joint Stock Bank (Eximbank) expects its 2023 profit plan at VND5,000 billion before tax, an increase of 42.9% compared to the previous year with an expected level of VND3,500 billion in 2022.
According to the survey results on business trends of credit institutions in the first quarter of 2023 by the State Bank of Vietnam (SBV), credit institutions are more cautious when forecasting, with 56.4-75.4 % of credit institutions expecting their business to improve in the first quarter and the whole of 2023, but the level of improvement is lower than in 2022.
95.3% of credit institutions expect positive profit growth in 2023 compared to 2022, 2.8% of credit institutions expect negative profit growth and 1.9% expect profit to remain unchanged.
In addition, in 2023, credit institutions expect objective factors to have a more positive impact than in 2022, of which "customer's business and financial conditions" are expected to be the factor having the most positive impact to help improve the business situation of credit institutions. Among the objective factors, "competition from other credit institutions" continues to be considered the most worrying factor that may affect the "decline" of the business situation of credit institutions in the whole of 2023.
In 2023, credit institutions forecast that customers' demand for banking services would grow positively in the first quarter of 2023 but increase at a slower rate in 2023 compared to 2022, in which demand for loans is expected to increase more than the demand for deposits and payments.
Regarding the liquidity of the banking system in 2023, credit institutions are expected to continue to improve compared to 2022. Capital mobilization of the whole credit institution system is expected to increase by an average of 2.9% in the first quarter of 2023 and increase 10% in 2023, adjusted down by 1.8 percentage points compared to the expectation in the previous survey period.
The credit balance of the whole system is expected to increase by an average of 4% in the first quarter of 2023 and increase by 13.7% in 2023, adjusted down by 1.9 percentage points compared to the expectation in the previous survey period.
Many credit institutions believe that the situation of bad debt handling in the fourth quarter of 2022 has improved but not as expected and will continue to improve slightly in 2023.