(DTCK) The data of six-month profit of the banking industry was quite unexpected, when many banks had completed half, even more than half of the business target for the whole year.
Talking to Securities Investzment Newspaper, Pham Quoc Thanh, general director of HCM City Development Joint Stock Commercial Bank (HDBank) estimated that the bank’s profit before tax in the first six months reached 2.3 trillion dong, equaling 50 percent of the yearly plan. This year, HDBank targeted a pre-tax profit of 13 percent higher than the previous year.
Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) also announced six-month consolidated profit before tax at 6.6 trillion dong, equivalent to 64 percent of the whole year plan. In particular, the parent bank alone contributed nearly 4.2 trillion dong, equal to 64%.
This year, VPBank had set a fairly conservative plan, with a pre-tax profit target of 10.214 trillion dong, a slight decrease of 1.1 percent compared to 2019 and according to the Bank’s leaders, the profit of the whole year 2020 could reach a higher level from 10 percent to 20 percent of the set target.
Tien Phong Commercial Joint Stock Bank (TPBank) had just announced its six-month preliminary business results, with pre-tax profit of 2.034 trillion dong, an increase of 25 percent compared to the same period last year and equal to 50 percent of the yearly profit plan (4.068 trillion dong).
At the conference of business activities in the first six months, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) said, as of the end of June, bank credit balance was over 772 trillion dong, rose by five percent comparing to 2019.
In particular, the retail credit grew by 7.4%, accounting for 51.8 percent of total loans and increased by 1.2 percentage points compared to 2019.
Earlier, at the annual shareholders general meeting (AGM), Vietcombank said that the expected profit in the first six months was nearly 11.3 trillion dong.
Sharing at the AGM held in May 2020, Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) said that it was expected that by the end of Q2/2020, the bank would achieve about 6 trillion dong of profit, an increase of more than 12 percent compared to the same period last year. Although VietinBank still kept the target of profit in 2020 open, the credit started to grow again at the end of Q2, showing signs of prosperity in the bank’s business results this year.
A series of other banks also fulfilled 50 percent of the profit target in 2020 after six months such as Vietnam International Commercial Joint Stock Bank (VIB) (55%), Asia Commercial Joint Stock Bank (ACB) (52%); Military Commercial Joint Stock Bank (MBB), Saigon Hanoi Commercial Joint Stock Bank (SHB) (50%).
Not only large banks but also small banks like Saigon Bank for Industry and Trade (Saigonbank) also announced positive business results.
Specifically, the bank’s half-year profit before tax reached 125 billion dong, fulfilling 96 percent of the year plan, the risk provisioning cost plummeted by 86 percent to 6 billion dong, helping Saigonbank record a sharp increase in profit of the first six months of this year.
Banks were more optimistic with prospects for Q3
FiinPro had just announced the profit prospects of 19 credit institutions, accounting for 63.2 percent of the system’s total outstanding loans and 98 percent of the banking capitalisation on three stock exchanges Hochiminh Stock Exchange (HOSE), Hanoi Stock Exchange (HNX), and Unlisted Public Company Market (UPCoM).
Based on an analysis of business plan data developed by bank management, the report identified the new normal period that formed with the banking group after the Covid-19 epidemic was under control and banks were confident to offer better earnings prospects.
Profit after tax in 2020 of 18 out of 19 banks on the stock exchange (especially VietinBank left open the profit target) was expected to increase by 4.9 percent compared to 2019.
In particular, Vietcombank aimed to increase profits by 10%. Based on the profit growth plan of 18 banks, the average earnings per share of the group calculated by FiinPro grew by 0.8 percent after adjusting dilution.
According to FiinPro, this was a positive sign, if not taking into account the effects of debt restructuring due to the Covid-19 epidemic. This expectation was due to changes in the bank’s accounting policies under Circular 01/2020/TT-NHNN.
In fact, balance structured in accordance with the Circular would still be recognised as qualified debt, so no provision was required.
As these policies change, the Covid-19′s impact on credit quality and the bank’s profitability would be reflected. Banks also expected profit to improve more positively after September 2020.
Results of a survey on business trends of credit institutions in Q3/2020 of the Statistical Forecasting Department, SBV had just announced that credit institutions lowered the forecast on the growth rate of outstanding loans in 2020 in two consecutive surveys.
Credit balance of the banking system was expected to grow by 3.5 percent in Q3/2020 and increase by 10.5 percent in 2020, a sharp decrease compared to the corresponding expectations of 13.1 percent to 14.1 percent of the two previous surveys.
However, 54.3 percent of credit institutions expected in Q3, the business results improved better than in Q2. However, besides that, still 15.3 percent of credit institutions were concerned that business results would decline.
This year, big banks still set a fairly high profit after tax target (over 10%) including Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) (17%) and VCB (10%). Some smaller banks with growth prospects include Vietnam Export Import Commercial Joint Stock Bank (Eximbank) (21.7%), HDBank (12.6%) and VIB (10.2%).
