Banks collect trillion from services

	Banks expected to maintain good performance in 2019
	Credit collection contributes to lower and lower proportion of total banking activities
	Profits soar despite slow in bank credit growth

Revenues of banks tends to increase from service fees. Photo: ST

Investment securities trading activities also brought about double revenue in comparison to the previous year, reaching more than VND 300 billion. In addition, net profit income also grew significantly while provision expenses were significantly reduced.According to the financial report of the fourth quarter of 2018 from the Military Commercial Joint Stock Bank (MB), in 2018, MB’s pre-tax profit was VND 7,767 billion, up 68% compared to 2017. Notably, net profit from services sharply increased 2.3 times, collecting VND 2,564 billion. In which, only business and insurance services collected VND 1,300 billion.

Service activities of Lien Viet Post Bank (LienVietPostBank) also increased 2.3 times compared to 2017, bringing VND 148 billion to the bank. Thereby contributing significantly to the bank’s pre-tax profit of VND 1,213 billion in 2018. Similarly, An Binh Commercial Joint Stock Bank (ABBank) also collected VND 392 billion from services in 2018, equivalent to 226% compared to 2017.

Only in the fourth quarter of 2018, the revenue from ABBank's service fees was VND 262 billion, up by 370% compared to the same period in 2017. Accordingly, the revenue from services contributed up to 42.4% of the bank's pre-tax profit in 2018, up from 28.6% in 2017.

As a result, at the end of 2018, ABBank collected VND 924 billion of pre-tax profit, up 53% against 2017. Tien Phong Commercial Joint Stock Bank (TPBank) also announced achieving pre-tax profit of VND 2,258 billion after provisioning for risk, nearly doubling compared to 2017. TPBank said that in the context of limited credit growth, the Bank has actively focused on promoting services and expanding other business segments to increase revenues. Therefore, the proportion of non-interest revenues on total revenue also rose remarkably. Accordingly, in 2018, the proportion of net revenue from credit interest only accounted for 78%, down 10% compared to 2017, while net non-interest revenues increased more than 3 times and the proportion increased more than 22% of total net revenue, compared with 12% in 2017. Domestic and foreign payment activities as well as card services also contributed to significant revenues for the bank.

TPBank continues to strongly invest in technology in both products, services and operating process of the bank. It is known that thanks to the technology application, improvement, digitization and automation of internal processes have helped the bank significantly improve its labor productivity, save a lot of operating costs and also improve the quality of services.

The LiveBank automated banking system that TPBank invested in, has been promoting its efficiency, and gaining more and more trust from many customers. This system now allows 24/24 operation, helping banks save a lot of operating costs, because the average transaction cost on LiveBank is only 30% of the transaction cost at the counter.

The revenue increased rapidly, while saving the costs, it helped to reduce the bank's CIR ratio (cost / net income) from approximately 50% last year to 43% in 2018. Mr. Nguyen Hung - TP Bank Director General shared, that in the coming time, TPBank will develop more new products and services satisfying the customer’s needs, especially focusing on the segment of individual and small and medium-sized customers.

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The bank will continue prioritizing the increase in revenue from service fees, boost guarantees, international payment and insurance activities, and at the same time enhancing the non-cash payment and continuing to deploy digital banking services.