In banking activities, profit is often the first and outstanding criteria when comparing among members. However, from the perspective of governance and following the long-term strategy, total assets is the fierce competitive factor.
The “Profit is temporary, market share is permanent” view was discussed by some commercial bank leaders in the past. In fact, many banks experience profit ups and downs, but total assets must always follow the development pace, and market and economic expansion. That is a long way.
The total assets of commercial banks include and reflect all values of each bank, of which the most important elements are customers and market shares.
Banks may lose or experience decline in short-term profits, but if they lose market share and customers (reduction in total assets), the step back can cause long-term effects.
The financial statements of 24 banks in the third quarter of 2019 showed that by the end of September 2019, the total assets of the group were 8,175 trillion dong, up by 8.9 percent compared to the beginning of the year.
In particular, the big 4 state-owned banks (including Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) still took the lead with total assets of each bank exceeding 1,000 trillion dong. In which, BIDV and Agribank have reached this milestone since 2016, while VietinBank and Vietcombank have respectively reached this milestone in 2017 and 2018.
With the total assets of 1,425 trillion dong, up by 8.56 percent over the beginning of the year, BIDV is the bank with the largest total assets in the system.
Although Agribank has not published its financial statement in the third quarter of 2019, based on the data updated in the end of June 2019, the bank’s total assets were 1,353 trillion dong, up by 5.51 percent compared to the beginning of the year, ranking the second in the system.
With 1,202 trillion dong in total assets as of late September 2019, VietinBank currently ranks the third in the system but it is having the smallest total asset growth in the group with only 3.24 percent from the beginning of the year.
Vietcombank ranks the fourth in the system in terms of total assets with 1,157 trillion dong, up by 7.77 percent over the beginning of the year.
Accordingly, the total assets of these four banks have reached 5,138 trillion dong, accounting for 63 percent of the total assets of the surveyed group.
In the group of private commercial banks, Saigon Commercial Joint Stock Bank (SCB) is having the largest total assets with 552.5 trillion dong, up by 8.57 percent over the beginning of the year; followed by Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank, 450.2 trillion dong), Military Commercial Joint Stock Bank (MBB, 397.4 trillion dong), Vietnam Technological and Commercial Joint Stock Bank (Techcombank, 367.5 trillion dong), Vietnam Prosperity Commercial Joint Stock Bank (VPBank, 358.2 trillion dong), etc.
Considering growth rate, Vietnam International Commercial Joint Stock Bank (VIB) is having the fastest total asset growth in the first nine months of the year, with up to 26.2%, reaching 175.6 trillion dong.
Similarly, some small and medium-scaled banks such as Vietnam Thuong Tin Commercial Joint Stock Bank (Vietbank), Nam A Commercial Joint Stock Bank (NamABank) and Tien Phong Commercial Joint Stock Bank (TPBank) are having fairly good total asset growth, with respectively 19%, 17 percent and 13 percent over the beginning of the year.
Regarding customer lending, by the end of September 2019, BIDV continued to lead the system when it used up to 75.3 percent of the total assets, equivalent to more than 1,073 trillion dong lending to the economy, up by 8.57 percent over the beginning of the year.
By the end of June 2019, Agribank also spent 1,055 trillion dong lending to customers, up by 4.89 percent over the beginning of the year.
VietinBank and Vietcombank respectively lent out 899 trillion dong and 708 trillion dong to the economy, reaching respectively 3.95 percent and 12 percent compared to the beginning of the year.
Meanwhile, although the group of joint stock banks accounted for smaller market share, it is having much faster credit growth rate. Techcombank and VIB are the two typical examples.
In the first three quarters of the year, Techcombank and VIB’s lending to customers grew by more than 28 percent over the beginning of the year. This number was 24.34 percent for NamABank and 20.7 percent for Orient Commercial Joint Stock Bank (OCB). It is known that except for NamABank, the remaining three joint stock banks have soon received approval of the State Bank of Vietnam (SBV) to apply Basel II. Accordingly, their credit growth limits possibly have been raised.
Regarding customer deposits, just by the end of June 2019, Agribank’s deposits reached 1,175 trillion dong, exceeding the amount of capital deposited in BIDV in the end of June 2019 which was over 1,084 trillion dong.
VIB continued to be the fastest bank in attracting customer deposits with up to 34 percent in the first three quarters of the year, followed by National Citizen Commercial Joint Stock Bank (NCB), 23.74%), NamABank (20.64%) and VPBank (20.33%).
