Financial reports released by some banks in the first quarter have reflected the adverse impacts of the COVID-19 pandemic on their business activities, with declining profits and rocketing bad debts.
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) reported that its pre-tax profit shrank 11.14 percent year-on-year to only 5.22 trillion VND (223 million USD).
As of March 31, overdue debts at the bank exceeded 11.25 trillion VND, up nearly 2.9 trillion VND.
Vietcombank’s total revenue in the first three months increased only 4 percent as compared to the same period last year to over 12.2 trillion VND. Meanwhile, operational costs were up 12 percent to 4.91 trillion VND and risk prevention spending also expanded 43 percent to 2.15 trillion VND.
As one of the banks pioneering in cutting interest rates and taking support measures towards businesses struggling against the pandemic, Vietcombank is expected to meet more difficulties in the next quarters.
The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) failed to join the trillion club as its pre-tax profit declined 7 percent to only 988 billion VND. Its net profit stood at 785 billion VND.
In the quarter, the bank earned only 71 billion VND from other activities, down 76.6 percent year-on-year, mainly coming from bad debt settlement.
Its total revenue reached only 3.88 trillion VND, a slight rise of 9.72 percent, as compared with operational costs at 2.47 trillion VND, up 20.84 percent year-on-year.
As of March 31, its bad debts reached 6.04 trillion VND, up 313 billion VND from the beginning of the year.
A similar situation was also seen in Kienlong Commercial Joint Stock Bank (Kienlongbank) whose post-tax profit dropped 23.25 percent to 45.5 billion VND.
The decline was mainly due to the sharp rise in risk prevention spending that hit 68.8 billion VND, up nearly 3.7 percent from the corresponding time last year.
SSI Securities Corporation forecast that the gloomy picture will continue in the second quarter when profits from interests, fees and bad debt collection are expected to drop as banks offer preferential packages and cut transaction costs.
https://vietnamnet.vn/en/business/banks-looked-gloomy-amidst-covid-19-635636.html
