Statistics of 17 banks listed on HCM City Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX) and registered for trading on the Unlisted Public Company Market (UPCoM) gathered in the first three months of the year showed that bank stocks continued to maintain uptrend after one positive year. Some codes gained well such as VCB of Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank, 25.4%), EIB of Export Import Commercial Joint Stock Bank (Eximbank, 24.3%), MBB of Military Commercial Joint Stock Bank (MBBank, 16.3%). Some other bank stocks also increased during the period, such as HCM City Development Commercial Joint Stock Bank (HDBank), Vietnam Prosperity Commercial Joint Stock Bank (VPBank), Asia Commercial Joint Stock Bank (ACB), etc.
Le Anh Tri director of Phu Hung Securities District 3 branch said that in 2018, bank group is one of the groups recording the most impressive business results on the exchanges. Most banks generated the highest revenue and profit ever. Typically, Vietcombank attained more than 18 trillion dong of pre-tax profit, up by 60 percent compared to 2017. HDBank also impressed the public with a record high profit of 4.005 trillion dong, up by more than 65%.
Experts forecast that the outlook of bank stocks will continue to be optimistic this year. However, due to a year of strong growth, investors have a more cautious expectation, especially when the State Bank of Vietnam (SBV) tightens the credit growth rate at about 15%. Lending to some areas such as real estate will also be more strictly controlled in 2019.
“On the other hand, banks this year will have to pay much attention to the issue of bad debt restructuring. By the end of 2018, there were about 19 banks with bad debt outstanding of over 126 trillion dong at Vietnam Asset Management Company (VAMC), representative of Phu Hung Securities affirmed.
Five banks have cleared off all bad debts at VAMC, including Vietcombank, Vietnam Technological and Commercial Joint Stock Bank (Techcombank), MBBank, Vietnam International Commercial Joint Stock Bank (VIB) and Orient Commercial Joint Stock Bank (OCB). In addition, some potential retail banks with such as HDBank also gained significant achievements in controlling asset quality with the lowest bad debt ratio in the system, reaching only 0.97 percent after clearing 33.7 billion dong of bad debts at the company. These are optimistic bank stocks this year.
On the other hand, in addition to the five banks that have been allowed to apply the Basel II standards, including Vietcombank, VIB, Tien Phong Commercial Joint Stock Bank (TPBank), MBBank and VPBank, the remaining banks are also rushing to tighten risk management in order to soon carry out the Basel II.
For HDBank, of which the Annual general Meeting (AGM) is about to be held on April 23rd, the expert from Phu Hung Securities said that it is one of the strongest retail banks in the market last year. Closing 2018, HDBank recorded a consolidated pre-tax profit of 4.004 trillion dong, up by 65.7 percent thanks to the positive profits of both the parent bank and HD Saison with respectively 3.250 trillion dong (up by 59.29%) and 898 billion dong (up by 72.73%).
Due to the fairly prudent expectation of investors, HDB stock of HDBank experienced a reduction, similar to the banking industry. Closing the session on April 19th, HDB stood at the reference price of 28,000 dong per share.
The recently announced report which analysed the prospect of HCM City Securities Company (HSC) also recommended investors to buy HDB shares. With the assumption that HDBank is not yet merged into Petrolimex Group Commercial Joint Stock Bank (PGBank), HSC predicted the consolidated pre-tax profit of HDBank at 5.098 trillion dong, up by 27.3%. The company also maintained positive assessment for HDB shares and at the same time estimated a reasonable value of 38,500 dong per share.
Regarding the merger deal with PGBank, HDBank is still waiting for final approval from the SBV. However, HSC still holds a positive view and believes that the exclusive cooperation with Petrolimex Group in 10 years can help HDB complete the multi-sector retail strategy.
Tri from Phu Hung Securities also agreed that once the merger is successful, HDBank will have a great opportunity to expand its network, exploit huge customer database and request for more credit growth room.
Last year, HDBank posted the pre-tax profit of 4.005 trillion dong, the highest ever, up by 65.7 percent compared to 2017. The bank’s Return on Equity (ROE) and Return on Asset (ROA) were respectively 20.27 percent and 1.58%. The separate bad debt ratio of HDBank was strictly controlled at 0.97%, the lowest level of the entire sector.
By December 31st 2018, HDBank’s total assets reached 216.108 trillion dong, up by 14.1 percent compared to 2017. The bank’s total mobilisation was 191.588 trillion dong, equity increased by 14 percent to 16.828 trillion dong. HDBank is ready to apply the Basel II standards when being approved by the SBV.
In 2018, HDBank also completed opening 45 more branches and transaction offices, raising the network size to 285 points. On the stock market, HDB stock was in the group of 20 largest market capitalisation stocks on the HoSE.
