The picture of banks’ business performance in the first six months (H1) of 2019 is gradually getting clearer. Contrary to the “bright colour” seen in the entire system in 2018, the differentiation in 2019 is clear. While large banks and some medium-sized banks are growing rapidly and some have even run out of credit growth room, small banks are struggling to find a foothold and experiencing increasingly smaller scale. The total assets of many of them declined in H1 2019.
At Petrolimex Group Commercial Joint Stock Bank (PGBank), the bank’s total assets by June 2019 were 28.211 trillion dong, down by 4.9 percent compared to the end of March and down by 5.6 percent compared to the beginning of the year.
The bank’s lending only rose up by 1.2 percent in six months, which means that 250 billion dong were disbursed. The outstanding loans to customer reached only 22.080 trillion dong, and capital mobilisation also dropped by up to 7.8 percent to 21.519 trillion dong.
While credit activities recorded low growth, PGBank’s deposits at the State Bank of Vietnam (SBV) fell by up to 70 percent to 580 billion dong. This is the main reason leading to the bank’s reduction in total assets.
Since the scale did not grow, PGBank’s business results were also not very positive while waiting for the merger with HCM City Development Commercial Joint Stock Bank (HDBank). The bank’s pre-tax profit was only 94 billion dong in H1, down by five percent compared to the same period of 2018 due to the decrease in net interest income and the sharp rise of provisions for risks.
At National Citizen Commercial Joint Stock Bank (NCB), the H1 credit growth was also very low at only 1.6 percent. Similar to PGBank, the decline of the bank’s deposits at the SBV of 69 percent made the total assets of NCB to fall by 2.4 percent.
The profit results of NCB’s businesses were all in “red” as they were much lower than the same period of 2018. The bank’s total operating income was only 463 billion dong, down by up to 23 percent compared to the same period of last year. However, thanks to the cut in operating expenses and provisions for risks, NCB still recorded 21 billion dong in H1, up by 32 percent compared to the same period of 2018.
Viet A Commercial Joint Stock Bank (VietABank) also experienced a 4.1 percent decline in total assets in the first two quarters of the year, although its lending to customer still developed by 7.4 percent. It is because the bank’s deposits at other credit institutions (CIs) and lending to other CIs strongly fell by 29 percent to 10.905 trillion dong.
Regarding business results, VietABank’s pre-tax profit in H1 also dropped by 19 percent, reaching 89 billion dong. The bank’s income from net interest declined by 15 percent while other business activities also recorded not very positive results. In which, service segment suffered loss, and income from foreign exchange and securities trading did not post significant profit.
Despite not seeing reduction in total assets, many banks also recorded very slow total asset growth. For example, the total assets of An Binh Commercial Joint Stock Bank (ABBank) only increased by 1.2 percent in H1 due to the decline of up to 5.1 percent in lending to customers. Saigon Commercial Joint Stock Bank for Industry and Trade (Saigonbank) posted only 4.5 percent rise in total assets (equivalent to 917 billion dong), reaching 21.291 trillion dong. The bank’s lending to customers also increased by only 3.8 percent.
