Credit growth is slow, many banks "suffered" loss of profit in the third quarter

	Banks set a lot of "ambitions" with the goal of credit growth
	Banks' "step back" in the second quarter
	Credit growth expected to improve in remaining months: Experts

To do business more effectively, NCB is implementing activities to enhance control and risk management.

In the financial report for the third quarter of 2023, a series of banks reported a decline in profits.

In the third quarter, Techcombank recorded a pre-tax profit of nearly VND 5,843 billion, down 13% over the same period last year, but up 3.4% over the second quarter. Accumulated in the first 9 months of the year, this bank's profit reached VND 17,115 billion, down more than 17.8% over the same period last year.

VPBank's financial report said that consolidated pre-tax profit in the third quarter of 2023 reached VND 3,117 billion, down 31% over the same period. Accumulated for 9 months, VPBank's consolidated pre-tax profit reached VND 8,279 billion, down 58% over the same period.

TPBank recorded the third quarter of 2023 with the lowest profit in the last 6 quarters when pre-tax profit reached VND 1,576 billion, down 26% over the same period last year. Accumulated for 9 months, TPBank's pre-tax profit is VND 4,959 billion, down 16% over the same period last year. According to TPBank's explanation, the reason was that the business situation of enterprises was not stable and had not seen much improvement, along with TPBank implementing many preferential policies on interest rates and service fees to support clients.

BacABank also recorded a sharp decrease in third-quarter profit, reaching only VND 77 billion, down 73% compared to the same period in 2022. Accumulated for 9 months, BacABank's pre-tax profit reached VND 551 billion, down 23% over the same period. This bank explained that the reason for the sharp decrease in profits was mainly due to core business activities - net interest income in the third quarter decreased compared to the same period.

At PG Bank, pre-tax profit in the third quarter of 2023 was VND 56.6 billion, down 60% over the same period. According to PG Bank, the reason for the decrease in bank profits was mainly due to a 16% decrease in net interest income. In addition, net profit from service activities decreased by 42% due to the poor import-export situation of enterprises in the third quarter, leading to payment activities being greatly affected. In the first 9 months of the year, PG Bank's pre-tax profit reached VND 360 billion, down 7%.

Meanwhile, with NCB alone, this bank's third-quarter pre-tax profit was negative at more than VND 244.2 billion, down 24% over the same period last year. Accumulated for 9 months, NCB recorded a loss of more than VND 230.5 billion. However, NCB said that NCB's operational safety ratios continued to be maintained and ensure the prescribed limit. The bank was implementing activities to strengthen internal control and risk management systems and handle bad debts. In addition to the strong restructuring process with new business and investment activities, NCB also fiercely identified limitations to focus resources on solving them, determined to become a healthy and effective bank soon.

However, the market still has banks recording upward momentum. For example, MSB with pre-tax profit in the third quarter reached more than VND 1,675 billion, an increase of 12.5% compared to the third quarter of 2022, helping 9-month profit reach VND 5,223 billion, an increase of 8.3% over the same period last year. ACB's third-quarter profit reached more than VND 5,000 billion, recording growth compared to the last second quarter as well as compared to the third quarter of the same period in 2022...

At LPBank alone, pre-tax profit in the third quarter of 2023 increased slightly by 1% over the same period last year to reach VND 1,241 billion. However, due to the previous two quarters being less positive, this bank's 9-month accumulated pre-tax profit was at VND 3,687 billion, down 24% compared to the same period in 2022. LPBank's explanation also stated the reason from the economic context and implementation of supporting policies.

It can be seen that the decline in profits is mainly due to low credit demand, increased provisioning costs, and the impacts of reducing interest rates and fees to support the economy from the beginning of the year according to the policy of the Government. Currently, many banks have continuously lowered lending interest rates for old and new loans, along with launching many preferential credit packages. It is forecast that lending interest rates will continue to decrease by 0.25% in the last quarter of the year, helping the average lending interest rate for the whole year 2023 decrease by about 1.5-2%/year. If lending interest rates continue to decrease, profit margins at many banks will decline.

According to the results of a survey of business trends of credit institutions in the fourth quarter of 2023 conducted by the State Bank (SBV), most credit institutions reduced their profit expectations in the near future. Specifically, 82.6% of credit institutions expect pre-tax profits to grow positively in 2023 compared to 2022, and 13.8% of credit institutions fear negative profit growth.

Bao Viet Securities Company's (BVSC) analysis report forecasted that bank profit growth (stock group analyzed by BVSC) compared to the same period last year will reach 8% in the third quarter of 2023, reaching 5.5% in the last two quarters of the year and 5.2% in the whole of 2023. According to experts at SSI Securities Company, banks' profits in the third quarter of 2023 were deeply differentiated. Among the group of state-owned banks, VietinBank was the bank with the best profit growth, mainly due to a decrease in provision costs from a high level in the same period last year. Vietcombank would have the largest profit in the third quarter of 2023 when it reached about VND 9,000 billion, an increase of 18% over the same period.

According to experts, in the last months of the year, the "bright spot" for the banking business picture will be thanks to the significant improvement in credit growth from the beginning of September until now. In particular, capital is mainly poured into the fields of production and business, import and export with low-risk rates, causing little pressure on costs and bad debts. Furthermore, in the last months of the year, with low deposit interest rates, little capital cost pressure on banks.