So far, most banks have announced Q1/2018 business results, of which, many banks recorded quite large revenue and profit growth.
Vietinbank (coded CTG) has just organised the annual general meeting (AGM) in 2018 and announced financial statements in Q1/2018. Accordingly, in 2018, the bank targets at raising the total assets by 10-12 percent from the previous year. The oustanding loans increased 14%, while other proportions comply with regulations of the State Bank. Vietinbank also plans to handle the entire bad debt sold to the Vietnam Asset Management Company (VAMC) at the beginning of 2018.
Le Duc Tho, CEO of Vietinbank said credit growth, capital growth, liquidity of this bank is the best in Vietnam market. The bank’s management board structured capital sources to utilise profit.
Accordingly, VietinBank has achieved breakthroughs in growth right from the first months of 2018. Its total assets as of the end of Q1 increased 1.6 percent to 1,112 trillion dong. The total oustanding loans rose 3.3%, higher than the industry’s overall growth of 2.23%, reaching about 868 trillion dong. The capital mobilisation hit more than 1,000 trillion dong, mainly growing from capital market.
As such, Vietinbank’s pre-tax profit in Q1 was about more than three trillion dong, up more than 20 percent from the previous year. The Return on Asset (ROA) and Return on Equity (ROE) were 1.12 percent and 15.3 percent respectively.
Vietcombank (coded VCB) has just announced consolidated financial statements in Q1/2018. Accordingly, in the first quarter of 2018, the bank’s net interest income touched 6.197 trillion dong, up 17.5 percent from the same period last year. The profit from service activity surged 35.5%, earning 881 billion dong. The profit from securities business also swelled 166 percent to 277 billion dong.
Especially, profit from other activities brought Vietcombank up to 1.602 trillion dong net profit in one quarter only, up more than one trillion dong from Q1 last year. The bank recorded 4.259 trillion dong pre-tax profit, up 59 percent from Q1/2017. As such, Vietcombank completed 31 percent of the year plan only after the first three months.
However, Vietcombank’s total assets as of the end of Q1/2018 were 1,003 trillion dong, down 3.1 percent from the end of 2017. Of which, deposits at the State Bank and loans at other credit organisations plummeted.
Meanwhile, HDBank (coded HDB) has just announced impressive business results with profits in Q1/2018 at 1.045 trillion dong, tripling from the same period of 2017, of which, HDBank’s individual profit touched 851 billion dong, up 201.8 percent year-on-year and completed 27.5 percent of 2018 plan. The ROA was 1.5%, the ROE was 19.2%. The bad debt was tightly controlled at very low level, only accounting for 1.22%.
In Q1/2018, the operating revenue of MB alone also hit 3.679 trillion dong. The bank’s pre-tax profit stood at 1.746 trillion dong, contributing as much as 28 percent to the targeted profit in 2018. Of which, core revenue from interest income rose 30 percent year-on-year, the non-interest income including fees and services grew 68 percent year-on-year.
The individual oustanding loans improved five percent, equal to 89 percent of this year’s target. MB’s non-performing loan (NPL) ratio in the first three months of 2018 was controlled at 1.39%. The provisioning ratio/total operating revenue was currently 27 percent as provisions for VAMC bonds for this year are not available and debt quality continues to be improved.
LienVietPostBank is a rare case to have the interest income to decrease from the previous year. However, thanks to the reduction in provisioning, the bank’s profit still swells eight percent from the same period last year.
According to the assessment of some experts, credit growth at some banks is higher than deposit growth but at many banks such as LienVietPotBank, Techcombank, VPBank, etc. the capital mobilisation was faster.
According to BIDV’s announcement at the AGM on April 21, the deposit and credit growth reached 3.3 percent and 1.3 percent respectively as of the end of Q1/2018. Deducting the debt settlement, the credit growth was 2.3 percent and according to the bank’s representative, the aforementioned difference was reasonable in the common context when the State Bank has increased a large amount of dong after purchasing foreign currency.
According to Nguyen Tri Hieu, finance and banking expert, the sharp increase in banks’ profits was because over the last few years, banks have had to sacrifice profits to put for provision to handle bad debt, and shareholders also did not get dividends paid. Now, the provision has been reversed, generating unusual profits for banks.
Besides, the capital divestment also brings about large profit to some banks. For example, Vietcombank earned more than 513.14 billion dong from the share sale at Saigonbank, Cement Finance Company, OCB share auction. In addition, banks also apply many measures to cut costs.
According to the National Financial Supervisory Commission, bank profit has achieved good growth right in Q1/2018 partly because the developments of the economy are favourable for banking sector’s operations. In addition, there must mention such factors as the bad debt settlement process is improved thanks to Resolution No.42, and positive growth of consumer credit. This is also the prerequisite for banks to gain huge profits.
