Statistics of VnEconomy on 26 joint stock banks in the first six months (H1) of 2019 showed that in the structure of total operating income of banks, the net interest income continued to play a major role with continuously rising proportion.
Specifically, the total net interest income contributed 78.2 percent into the total operating income of 26 banks in H1 this year, up by two percentage points over the same period of last year.
However, the role of other activities saw many changes in the total revenue structure.
In particular, in the same period of last year, income from other activities (including capital contribution to buy shares) of banks were only the second largest after the net interest income, contributing more than nine percent to banks’ total revenue. However, in this period, the profit from this segment slightly decline and only contributed over 6.8 percent.
Instead, there is an emergence of service activities. In H1 2019, the service activities of 16 banks brought about 15.704 trillion dong of profit, up by 44 percent over the same period of last year and became the second largest profit-taking activity. The contribution of this segment in total revenue was 10.4 percent (8.3 percent in the same period of last year).
At some banks, this segment also developed strongly with much higher contribution in revenue compared to the average level, such as 21 percent in Vietnam International Commercial Joint Stock Bank (VIB), 20 percent in Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), 16 percent in Military Commercial Joint Stock Bank (MB), 15 percent in Vietnam Technological and Commercial Joint Stock Bank (Techcombank), etc. Only Viet A Commercial Joint Stock Bank (VietABank) recorded loss in service activities in this period with 6.8 billion dong.
The segment of foreign exchange trading continued to be maintained with a contribution of about 2.9 percent of total income. However, securities activities (trading securities and investment securities) is a low note of banks in H1 2019.
Many large banks recorded huge losses from securities segment, especially the trading of investment securities such as Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), VIB, Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank), Asia Commercial Joint Stock Bank (ACB) caused the profits from this segment to fall sharply.
The profit from securities activities in H1 2019 of 26 banks reached only 2.5 trillion dong, down by up to 51 percent. The contribution fell from four percent to only 1.7 percent in the first two quarters of the year.
Thanks to the net interest income and promotion of income from service activities, the total revenue of the above 26 banks grew by 15 percent over the same period last year.
The increase in non-interest income is one of the strategies to increase profits for banks when their credit growth limits are limited by the SBV. For many banks, boosting these activities has increased the proportion of non-interest income to a high level of over 25 percent such as Maritime Commercial Joint Stock Bank (MSB), Sacombank, Orient Commercial Joint Stock Bank (OCB), Tien Phong Commercial Joint Stock Bank (TPBank), Techcombank, MB and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank).
