Banks reduce profit expectations for 2024

A bank teller counts cash at a branch in Hà Nội. In the latest survey on business trends of credit institutions in the fourth quarter of 2024, 79.6 percent of credit institutions expect positive pre-tax profit growth compared to 2023, against 86.2 percent of credit institutions in the previous survey. Photo tinnhanhchungkhoan.vn

The survey of credit institutions on business trends in the fourth quarter of 2024 was conducted before Typhoon Yagi hit, so the banks' forecasts did not take into account the impacts of the disaster.

According to the survey results, the proportion of credit institutions that expect positive pre-tax profit growth in 2024 has decreased compared to a previous SBV survey, 79.6 percent against 86.2 percent in the previous survey.

In addition, 15.9 percent of credit institutions are concerned about negative profit growth, higher than the 11 percent listed in the previous survey.

The banks also responded that the liquidity of the banking system in the third quarter this year improved compared to the second quarter.

Credit institutions forecast that liquidity in the fourth quarter and all of 2024 will continue to improve compared to 2023.

The survey also shows that since the beginning of the fourth quarter, credit institutions have made slight increases to the deposit interest rate and maintained the lending interest rate at a low level.

For all of 2024, credit institutions forecast that the deposit interest rate will inch up by 0.1 percentage point and the lending interest rate will decrease slightly by 0.09 percentage points compared to the end of 2023.

According to the credit institutions, raised capital in the banking system is expected to increase by an average of 3.2 per cent in the fourth quarter and 7.9 per cent in the whole year, a significant decrease compared to the 10.1 per cent rate recorded in the previous survey.

Credit institutions predict that the banking system's credit growth will increase by an average of 4.8 percent in the fourth quarter and 13.2 percent in 2024 overall, a decrease of 0.9 percentage points compared to the 14.1 percent rate in the previous survey.

In the third quarter of 2024, banks also said the average bad debt ratio of the whole banking system did not decrease as expected in the previous survey, but instead increased slightly.

However, as the increase in the third quarter was narrower than that in the second quarter, credit institutions expect the bad debt ratio to be adjusted down in the fourth quarter this year.