Financial statements in Q1/2018 of many banks show that not only the net interest income, but also profit from service activities also increased sharply, contributing positively to the overall profits of banks.
Vietcombank’s consolidated financial statement in Q1/2018 showed that the bank’s net interest income reached 6.197 trillion dong, up 17.5 percent from the same period of 2017; the interest from service operation swelled 35.5 percent, touching 881 billion dong; the interest from business securities soared 166 percent to 277 billion dong. Noticeably, interest from other operations brought Vietcombank 1.602 trillion dong, up more than one trillion dong from the last Q1.
As a result, Vietcombank recorded the record high pre-tax profit of 4.359 trillion dong in Q1/2018 and completed one third of the whole year profit plan. In 2017, Vietcombank attained 5.378 trillion dong income from service operation and after deducting costs, interest from this operation touched 2.538 trillion dong, up more than 20 percent from 2016.
Techcombank has just released financial statements in Q1/2018 with the net interest income to increase 16.58 percent year-on-year, reaching 2.564 trillion dong; the interest from investment securities trading swelled 4.7 times, to 441 billion dong; the interest from capital contribution and share purchase improved 1.8 times, to 894 billion dong.
However, interest from Techcombank’s other business operations declined. Specifically, the interest from service operations decreased 10.1 percent to 491 billion dong, the interest from business securities trading fell 94.25 percent to 10 billion dong and the interest from foreign exchange trading diminished 49 percent to 45 billion dong.
Thanks to quite sharp reduction of credit risk provision (35 percent) to 824 billion dong, at the end of the first quarter of 2018, Techcombank achieved 2.569 trillion dong pre-tax profit, nearly doubling from the same period of 2017.
At ACB, the pre-tax profit in Q1/2018 hit 1.490 trillion dong, an increase of 2.5 times from the same period of 2017. Of which, the net interest income swelled 24.3 percent, reaching 2.373 trillion dong; the interest from service operation surged 42.3 percent, to 353 billion dong; the interest from foreign currency trading improved 18.2 percent, to 78 billion dong; the interest from business securities trading and investment securities soared 70 percent, to 143 billion dong; and other operations brought about 350 billion dong net interest, down 3.5 percent. Besides, the sharp reduction of risk provision from 50.5 percent to 8.3 percent also contributed positively to ACB’s overall profits.
For OCB, though operating and risk provisioning costs in Q1/2018 increased, the credit risk provision alone nearly doubled compared to the same period of 2017 but OCB still achieved the pre-tax profit of more than 618 billion dong, nearly three times higher than the same period, thereby completing more than 32 percent of the whole year profit plan. These results came from the sharp increase in all OCB’s operations. For example, investment securities brought about the unexpected profit of 277 billion dong, up more than five times from the same period last year; the credit operation touched more than 755 billion dong, up 62 percent; the interest from service swelled 47.6 percent, touching 62 billion dong.
At Sacombank, revenues from service in Q1/2018 continued to be positive with revenue from service operation to touch 752 billion dong (earning 544 billion dong profit after deducting costs), up 30.3 percent from the same period of 2017. In 2017, Sacombank earned 2.623 trillion dong profit from this operation.
*Profit picture expected to be bright
According to the report of the credit rating agency Moody’s, the average Return on Assets (ROA) of 14 Vietnamese banks increased from 0.7 percent in 2016 to 0.9 percent in 2017. This organisation forecasts that the profitability of banks will continue rising in 2018 thanks to stable macro-economic conditions, and positive growth of core income.
In fact, the business results in Q1/2018 of many banks show that the ROA, ROE were high. For example, in HDBank, in the first quarter, the ROA reached 1.5 percent, compared to the ROE at 19.2 percent. ROA and ROE of VPBank were 3.3 percent and 34.2 percent respectively. For Vietinbank, these indexes reached 1.12 percent and 15.33 percent respectively.
Overall, the business picture in Q1/2018 of banks had bright colours, with the highlight of clearly improving profitability. With favourable start, many banks expect that they will complete the business plan set for 2018, even there may have unexpected profit growth. For example, Vietcombank wants to gain more than 13 trillion dong pre-tax profit, compared to 10.8 trillion dong for Vietinbank; more than 10 trillion dong for Techcombank, 9.3 trillion dong for BIDV and nearly six trillion dong for ACB.
