Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) has released the consolidated financial statement for the first quarter (Q1) of 2020. Accordingly, the bank’s pre-tax profit in the quarter was 5.333 trillion dong, down by 11.14 percent compared to the same period of 2019. Meanwhile, the profits of the bank’s core businesses declined while provisioning costs soared.
In Q1 2020, the net interest income of Vietcombank only increased by 6.29 percent compared to the same period, reaching 9.034 trillion dong. The profit from service activities also slightly rose by 5.43 percent to 1.127 trillion dong. The foreign exchange trading income increased stronger by 19 percent to 1.107 trillion dong. The trading of securities suffered a loss of 54 billion dong. Other business activities of Vietcombank also fell by 11 percent with profit of only 1.039 trillion dong.
Vietcombank’s income from capital contribution was only 31 billion dong, down by 19 percent compared to Q1 2019. Accordingly, the extraordinary income from the divestment from the life insurance company FWD has not been recorded in this quarter.
The bank’s total operating income reached more than 12.2 trillion dong, up by four percent compared to the same period of 2019. Meanwhile, the operating expenses increased by 12 percent to 4.910 trillion dong, and risk provisioning expenses sharply rose by 43 percent to 2.152 trillion dong.
Among the types of operating expenses, there was no significant change in spending for employees, while spending for task management activities soared by 26 percent to 2.028 trillion dong.
Vietcombank’s mobilisation fund slowed down in the quarter. As of March 31st, the bank’s total assets were 1,140 trillion dong, down by 6.4 percent compared to the beginning of the year, mainly due to the strong reduction in the bank’s deposits at other credit institutions (from 190 trillion dong to 124 trillion dong, equivalent to more than 50%). Meanwhile, the outstanding loans to customers increased by 2.7 percent to 754.505 trillion dong.
Regarding capital source, the customer deposits at Vietcombank only increased by 0.6 percent to 934.048 trillion dong. Notably, the demand deposits at the bank fell by seven percent to 244.256 trillion dong. Accordingly, the bank’s Current Account Savings Account ratio (CASA) slightly dropped from 30.7 percent to about 29.4%.
Vietcombank’s bad debts as of late March stood at 6.191 trillion dong, up by 387 billion dong compared to the beginning of the year. The bad debt ratio inched up from 0.79 percent to 0.82%. The bank remains one of the banks with the lowest bad debt ratio in the system.
