Thanks to the increase of lending activities before the Lunar New Year, some banks partly maintained profit growth. However, many banks saw decline, predicting that their profit will be affected in the second quarter (Q2) of 2020.
Some banks kept their growth pace.
Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) reported a profit increase of 130 percent in Q1 2020. The bank’s total assets by the end of the quarter were 69.358 trillion dong, up by 0.6 percent over the beginning of the year. Meanwhile, the bank’s lending to customers grew by 2.7 percent to more than 41.709 trillion dong after provisioning, deposits of credit institutions (CIs) fell by 16 percent to over 6.494 trillion dong, and customer deposits rose by six percent. VietBank’s bad debt ratio by the end of Q1 2020 was 1.36%.
Similarly, according to the financial statement of National Citizen Commercial Joint Stock Bank (NCB), the bank’s pre-tax and after-tax profit in Q1 2020 both increased by 12.4 percent compared to the same period of 2019 thanks to the stable growth of income/ net profit sources.
In Q1 2020, despite suffering a loss of over one billion dong in foreign exchange trading and nearly eight billion dong in other activities, NCB still recorded a net profit from business activities of nearly 65 billion dong, nearly five times higher than Q1 2019, mainly thanks to the growth of NCB’s net interest income and income from services of respectively 36 percent and 24 percent over the same period of 2019 (reaching nearly 236 billion dong and over 15 billion dong, respectively). The bank’s trading of investment securities accounted a net profit of nearly 26 billion dong, nearly threefold higher than the same period of last year.
Therefore, although the bank’s operating costs were 196 billion dong, up by 10%; along with 20 billion dong of provisions for credit risks and 30 billion dong of the settlements under the restructuring scheme, NCB still earned nearly 15 billion dong of pre-tax profit and nearly 12 billion dong of after-tax profit, up by more than 12 percent over the same period of 2019.
By the end of March 2020, NCB’s total assets declined by 12 percent compared to the beginning of the year to more than 70.458 trillion dong, mainly due to the sharp fall of 72 percent in cash and gold deposits at other CIs and lending to other CIs to 4.276 trillion dong.
Meanwhile, the bank’s lending to customers was still nearly 37.807 trillion dong, levelled off compared to the beginning of the year. Trading of investment securities and other fee and interest receivables reached respectively 14.7 trillion dong and more than 3.396 trillion dong, up by 11 percent and eight percent, respectively.
Regarding capital source, NCB’s deposits of customers only inched up by two percent compared to the beginning of the year to 60.547 trillion dong. In contrast, the deposits and loans at other CIs and issuance of valuable papers respectively dropped by 85 percent and 34 percent over the beginning of the year, reaching nearly 1.828 trillion dong and more than 1.784 trillion dong.
NCB’s bad debt ratio was 2.2%, thanks to the bank’s restructuring of lending portfolio and strengthening of measures to control credit risks.
At Viet A Commercial Joint Stock Bank (VietABank), the Q1 2020 pre-tax profit was nearly 81 billion dong, with fairly big contribution from trading of investment securities (profit of 16.7 billion dong, strongly up compared to the 487 million dong in the same period of 2019) and sharp increase of foreign exchange trading with earnings of 15.6 billion dong.
While the bank’s profit from other activities also declined sharply to 79 million dong, compared to the eight billion dong recorded in the same period of 2019. The operating costs slightly rose by 9.4 percent to 151 billion dong. In the period, VietABank set aside four billion dong to provision for risks, while in the same period of 2019 there was no provision.
According to VietABank’s summarised consolidated financial statement for Q1 2020, while the bank’s lending activities grew fairly well at 5.2 percent compared to the same period of 2019, reaching 44.868 trillion dong. The bank’s mobilisation of customer deposits of customers also increased at a fairly good level of 6.5%, reaching 50.538 trillion dong. The total assets were 78.896 trillion dong, up by 3.2%. the lending growth made VietABank’s net interest income to increase by 34 percent to 210 billion dong.
Many banks recorded profit decline.
The pre-tax profit of Bac A Commercial Joint Stock Bank (BacABank) in Q1 2020 was 179 billion dong, down by 27 percent compared to Q1 2019. This is the lowest level in six quarters of the bank since Q4 2018. Although BacABank attained a net interest income of nearly 441 billion dong, up by 10 percent compared to the same period of 2019; and nearly nine billion dong of net profit in foreign exchange trading, up by 46%, but the bank’s pre-tax and after-tax profit still fell by 27 percent to respectively 179 billion dong and 143 billion dong. The main reason leading to the sharp net profit of service activities sharply decreased by 77 percent compared to the same period of last year to just above seven billion dong and the high provision for credit risks of over 44 billion dong, while the bank did not provision for risks in the same period of 2019. BacABank’s operating expenses also increased by 16 percent compared to Q1 2019, accounting for nearly 242 billion dong.
As of March 31st 2020, the total assets of BacABank were slightly up by two percent compared to the beginning of the year, mainly thanks to the 18 percent increase in interests and fee receivables to nearly 3.532 trillion dong and lending growth of one percent to 73.395 trillion dong.
By the end of Q1 2020, BacABank recorded an increase of eight percent in customer deposits and issuance of valuable papers compared to the beginning of the year, respectively reaching over 82.476 trillion dong and 6.633 trillion dong. Meanwhile, the bank’s deposits and loans at other CIs fell by 34 percent compared to the beginning of the year to 9.660 trillion dong.
Closing the first three months of the year, the total bad debts of BacABank rose up by 16 percent compared to the beginning of the year to nearly 580 billion dong. Of which, the doubtful debts (debt group 4) increased by 85 percent to nearly 33 billion dong, and the irrecoverable debts (debt group 5) increased by 27%, accounting for over 276 billion dong. Thus, the bank’s bad debt ratio increased from 0.69 percent to 0.79%.
For Saigon Commercial Joint Stock Bank for Industry and Trade (Saigonbank) recorded decline in many business indicators by the end of Q1 2020 while its bad debts increased. Specifically, in the first three months of the year, Saigonbank could not increase its mobilisation of customer deposits, resulting in a decline of 0.8 percent to 15.543 trillion dong. Meanwhile, the bank’s lending activities also fell by 2.3 percent to 14.215 trillion dong. The total assets of the bank, accordingly, declined by nearly 11 percent to 20.308 trillion dong.
Closing Q1 2020, Saigonbank recorded net interest income decline of 4.4 percent to 152 billion dong. The profit from service activities also decreased by 24 percent to 7.6 billion dong. The bank’s profit from foreign exchange trading saw a good growth of five times to 7.4 billion dong; while profit from other activities also slightly increased by 8.6 percent to 7.5 billion dong.
In the period, Saigonbank’s operating costs were up by 18 percent to 133 billion dong. The bank set provision for risks at over 6.5 billion dong, up by 51 percent over the same period of 2019.
For Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), the pre-tax profit by the end of March 2020 declined by 31.4 percent to 48.3 billion dong. The bank’s after-tax profit also dropped by 34 percent to nearly 44 billion dong. The bad debt ratio was 2.6%, higher than the 1.9 percent in the beginning of the year. The bank’s bad debts sharply increased in the sub-prime debts (debt group 3) from 36 billion dong at the beginning of the year to 123 billion dong as of March 31st 2020.
For Kien Long Commercial Joint Stock Bank (Kienlongbank), the pre-tax profit in Q1 2020 was only 57 billion dong, down by 23 percent over the same period of 2019, while bad debts rose by up to 6.6%. the bank’s consolidated financial statement in Q1 2020 showed that the bank’s mobilisation growth remained good with four percent in the first three months of the year, reaching 34.243 trillion dong.
However, since the Covid-19 pandemic has caused the credit demand of the market to fall, Kienlongbank’s outstanding loans only grew by one percent (equivalent to 351 billion dong) to 33.830 billion dong. As of March 31st 2020, the total assets of Kienlongbank rose up by 3.8 percent to 53.086 trillion dong.
Closing the first business quarter of 2020, Kienlongbank recorded a net interest income of 295 billion dong, up by 8.8%. In the period, Kienlongbank did not record any trading of investment securities. Other segments posted fairly good profit growth compared to the same period of 2019, such as 19 billion dong profit from service activities, up by 58%; 8.7 billion dong profit from foreign exchange trading, up by 5.8 times; and nearly 61 billion dong profit from other activities, up by over 15 times.
The bank’s operating expenses grew by 21 percent to 257 billion dong, but the profit before provisions still sharply increased by 64 percent compared to the same period of 2019 to 125 billion dong.
However, in the period, Kienlongbank unexpectedly raised its provisions for credit risks by 37 times over the same period of 2019 to nearly 69 billion dong. Thus, its pre-tax profit was only 57 billion dong, down by nearly 23 percent compared to the same period of last year.
According to the bank’s Q1 financial statement, its outstanding loans mainly focused on business households and individual customers, accounting for more than 74%, equivalent to 25.136 trillion dong.
By the end of Q1 2020, Kienlongbank’s bad debt ratio soared by 6.62 percent from one percent at the beginning of the year. The debt group 5 saw the fastest growth from 238 billion dong in late 2019 to 2.126 trillion dong as of late March 2020.
According to Kienlongbank, of the outstanding irrecoverable loans of 2.126 trillion dong as of March 31st 2020, there were 1.895 trillion dong of outstanding loans to a group of customers (secured by shares) of another bank (Sacombank).
