Commercial banks continued to earn much from services. Statistics from 14 listed banks having total assets of over 100 trillion dong (including Vietcombank, VietinBank, BIDV, Techcombank, VPBank, MB, Sacombank, ACB, HDBank, SHB, Eximbank, VIB, LienVietPostBank and TPBank) showed that the total net profit from service activities reached up to 24.6 trillion dong, up by 21 percent compared to 2017.
This increase is fairly positive, but not all banks recorded net profit growth from services, and some bank’s growth was 150 percent, 200 percent, or even 400 percent. The ranking of net profit from banking services thus saw many changes.
In 2018, BIDV (Commercial Joint Stock Bank for Investment and Development of Vietnam) was the leader in service sector as it collected 3.550 trillion dong of net profit, up by 20 percent compared to 2017, taking over the position of Techcombank (Vietnam Technological and Commercial Joint Stock Bank). Techcombank the largest private bank in the system experienced a decline in net service profit in 2018 with only 3.536 trillion dong.
Not only BIDV, two remaining state-owned banks including Vietcombank (Commercial Joint Stock Bank for Foreign Trade of Vietnam) and VietinBank (Commercial Joint Stock Bank for Industry and Trade of Vietnam) also achieved high net profit from services with respectively 3.401 trillion dong and 2.770 trillion dong, equivalent to the growth of 34 percent and 49 percent, respectively. Sacombank (Saigon Thuong Tin Commercial Joint Stock Bank) was thus knocked out from the top 4.
However, in its restructuring period which is full of difficulties, Sacombank’s maintenance of a modest growth in net profit from services (2.682 trillion dong, equivalent to two percent growth) is a commendable job.
The most impressive case among big banks is MB (Military Commercial Joint Stock Bank). This military bank recorded up to 127 percent increase in net profit from services, reaching 2.563 trillion dong. This result helped the bank jumped to the 6th position among the above mentioned 14 listed banks, up by three steps compared to 2017.
The 7th position belonged to VPBank (Vietnam Prosperity Commercial Joint Stock Bank) with net profit from services of 1.612 trillion dong in 2018, up by 10 percent; followed by ACB (Asia Commercial Joint Stock Bank) with 1.497 trillion dong, up by 26 percent.
In the group of smaller banks, three banks recorded growth in net profit from services of above 100 percent in 2018, including TPBank (Tien Phong Commercial Joint Stock Bank), HDBank (HCM City Development Commercial Joint Stock Bank), and LienVietPostBank (Lien Viet Post Commercial Joint Stock Bank). Specifically, the net profit from services of TPBank soared by up to 310 percent to 676 billion dong; while that of HDBank rose by 114 percent to 438 billion dong and that of LienVietPostBank increased by 128 percent to 148 billion dong.
The net profit from services of VIB (Vietnam International Commercial Joint Stock Bank) also increased fairly strongly by 81 percent, reaching 734 billion dong. That of Eximbank (Export Import Commercial Joint Stock Bank) slightly grew by five percent to 346 billion dong. Meanwhile, SHB (Saigon Hanoi Commercial Joint Stock Bank) recorded a decline of up to 56 percent in this indicator with 641 billion dong due to the absence of a single extraordinary profit from insurance activities.
In general, payment traditional service and insurance emerging service in the past few years were the main contributors to these results. Going further, there are two activities bringing profit to insurance services: the one-time agent fee related to insurance products and insurance commissions. This one-time fee contributes to the net profit from services, but usually decreases in the following years.
Some banks are now recording large proportion of revenue from insurance services, such as VPBank, MB and SHB. The revenue from this activity accounted for 71 percent of SHB’s service revenue, 50 percent of MB’s, and 57 percent of VPBank’s.
Some other banks earned from both payment and insurance services, such as VIB and TPBank. For TPBank, the revenue from payment and insurance services respectively accounted for 31 percent and 43 percent of the bank’s total service revenue, while these numbers at VIB were respectively 33 percent and 23 percent.
For big banks, the revenue from services mainly came from payment services. For example, Vietcombank’s revenue from payment accounted for 66 percent of its total service revenue. For Techcombank’s case, in addition to the payment revenue (which accounted for 40 percent of total service revenue), the bank also attained a significant revenue from securities underwriting service (accounted for 26 percent of total service revenue).
