Statistics of provision expenses for credit risk in the first six months of 2019 of 26 joint-stock commercial banks showed that Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) were the two banks with the largest provisioning amount, respectively 10.71 trillion dong and 7.477 trillion dong.
Other banks with a provision of trillions dong can be mentioned as: Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) with 6.47 trillion dong, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) with 3.317 trillion dong, Military Commercial Joint Stock Bank (MB) with 2.364 trillion dong and SaiGon Thuong Tin Commercial Joint Stock Bank (Sacombank) with 1.046 trillion dong.
The remaining banks made provisions from a few dozen to a few hundred billion dong, including some banks in top scale as Vietnam Technological and Commercial Joint Stock Bank (Techcombank) with only 239 billion dong, Asia Commercial Bank (ACB) with only 95 billion dong, HCM City Development Joint Stock Commercial Bank (HDBank) with 532 billion dong, Sai Gon Hanoi Commercial Joint Stock Bank (SHB) with 373 billion dong.
Notably, the calculation showed that only two banks BIDV and VietinBank made a total provision of 18.187 trillion dong, larger than the figure of 16.875 trillion dong of 24 banks combined.
The large amount of provision is usually caused by two reasons: Large-scale banks have large amounts of provisioning and banks proactively makes provisions to handle outstanding bad debts. With BIDV and VietinBank, the large amount of appropriation was due to both reasons.
Excluding provision, the top five banks have had the highest profit in the first half of 2019 in the following order: BIDV, Vietcombank, VietinBank, VPBank and MB. However, after making provision, the top five was: Vietcombank, Techcombank, VietinBank, MB and BIDV.
Some leading banks in provisioning also led the ratio of provision on net profit, typically BIDV (69 percent), VPBank (60 percent) and VietinBank (58 percent).
Compared to the same period last year, the provisions of all three banks increased, such as BIDV increased by two percent, VPBank increased by five percent, VietinBank increased by 10 percent.
Other banks with a provision ratio of over 50 percent were all small banks, such as National Citizen Commercial Joint Stock Bank (NCB) at 72 percent, Petrolimex Group Commercial Joint Stock Bank (PGBank) at 65 percent and VietNam Asia Commercial Joint Stock Bank (VietABank) at 51 percent. Meanwhile, although Sacombank was in the process of drastically handling bad debts, the rate of provisioning was not high, only 42 percent.
Some of the top banks in terms of scale but recorded the low provisioning level can be mentioned as Techcombank with only four percent, ACB with only three percent. Especially, Vietnam Export Import Commercial Joint Stock Bank (Eximbank) recorded the reversal of provision for credit risk in the first half of 2019.
