In the past few years, the “Big 4″ banks including Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) have continuously competed in rankings. Despite major changes or significant declines in growth in each year but the difference in growth between the four banks is not too big, particularly the criteria in size.
Regarding the total asset criteria, Vietcombank saw the most volatility in growth as it ranked the first in 2017 with 31 percent but ranked last in 2018 with only four percent. However, on average, the total asset growth of Vietcombank still took the lead with 17 percent per annum, slightly higher than the 16 percent of BIDV and 14 percent of VietinBank and Agribank.
Concerning the equity criteria, year 2018 recorded high equity growth of banks except for VietinBank. In 2018, the equity growth of Agribank reached 20 percent, while it was respectively 18 percent and 12 percent for Vietcombank and BIDV. VietinBank recorded six percent equity growth in 2018. The bank has not only ran out of room to increase capital and the State ownership has reached the minimum limit, its room to expand outstanding credit has also run out, affecting the bank’s profit growth thereby affecting the growth of equity.
Meanwhile, Agribank is a fairly special case as a large part of its equity increase in 2018 came from the suspension of consolidation of Agribank Finance Leasing Company II (ALCII) after the court declared bankruptcy of this company. That helped Agribank’s equity increase by up to 7.107 trillion dong
Considering the recent three years, the equity growth of Agribank and Vietcombank was similar at 11 percent per annum, followed by BIDV with nine percent per annum and VietinBank with six percent per annum.
While the 2018 total asset growth of the “Big 4″ banks was the lowest in three years, their equity growth was the highest in three years. This reverse movement showed that in 2018, state-owned banks restructured towards reducing financial leverage, increasing safety, partly because they were strongly motivated by the determination of the State Bank of Vietnam (SBV) to gradually slow down the credit growth momentum and partly because they themselves had to balance their capital adequacy ratio (CAR).
This was partly shown in the outstanding loans over the past three years. The growth in outstanding loans in 2018 of the Big 4 was the lowest in three years. In the period of 2016 2018, Agribank’s outstanding loan growth fell by respectively from 19 percent to 18 percent and then 14 percent. Meanwhile, that of Vietcombank declined from 19 percent to 18 percent and then 16 percent, that of VietinBank declined from 23 percent to 19 percent and then nine percent, and that of BIDV dropped from 21 percent to 20 percent and then 14 percent.
However, considering the three-year average, the outstanding credit growth of the Big 4 saw modest difference, all being around 17-18 percent per annum.
The growth in customer deposits of the Big 4 also fell in 2018. This is understandable because when the lending slowed down, mobilisation must also be limited to optimise profit margin.
Nevertheless, unlike the outstanding credit, the difference in customer deposit growth of the Big 4 in the past three years was relatively obvious. BIDV’s growth was the highest (21 percent), followed by VietinBank’s (19 percent), Vietcombank’s (17 percent) and Agribank’s (13 percent).
In terms of profit, year 2018 continued to be a special year as it witness significant differentiation in the net profit growth. Vietcombank took the lead in net profit growth with 46 percent, followed by Agribank with 26 percent, and BIDV with 21 percent. VietinBank recorded negative net profit growth of 17 percent as the bank ran out of room to expand credit.
However, considering the past three years, BIDV was the leader in net profit growth with 28 percent per annum, closely followed by Vietcombank with 27 percent per annum, and Agribank with 25 percent per annum. VietinBank’s net profit growth in the past three years was only eight percent per annum.
In terms of after-tax profit, Vietcombank recorded the highest average growth in three years with 41 percent per annum, followed by Agribank with 36 percent.
It should be noted that the average net after-tax profit growth in the past three years of Agribank is high because the bank’s profit was fairly low in the past as it had to provision for risks and reduce bad debts before implementing equitisation.
On the contrary, BIDV used to have a relatively high profit base in the past, but the bank’s average after-tax profit growth in the past three years was only six percent per annum due to the large risk provisioning.
VietinBank’s after-tax profit significantly declined by 27 percent in 2018.
