PGBank’s financial report in the first nine months of 2019 showed that the bank’s pre-tax profit was 164 billion dong, up by 53.5 percent over the same period of last year. This result is mainly thanks to the cut in risk provisioning expenses from 294 billion dong in the same period of last year to 216 billion dong.
Meanwhile, PGBank’s operating income was not as expected with simultaneous revenue decline in business segments. Specifically, the nine-month net interest income of PGBank only reached 632 billion dong, down by 2.6 percent over the same period of last year. The profit from service activities, foreign exchange business and securities trading of the bank respectively reached 16 billion, 26 billion and 11 billion dong, down by respectively 34.6%, 4.8 percent and 56 percent over the same period of last year. The profit from other activities increased by 26 percent to 55 billion dong, while income from capital contribution was 14 billion dong.
Thus, PGBank’s total operating income in the first nine months of the year was only 789 billion dong, down by two percent compared to the same period of last year. Meanwhile, the operating income rose up by 1.5 percent to 408 billion dong. Accordingly, the net profit from business activities of PGBank was only 381 billion dong.
By the end of September 2019, the total assets of PGBank reached 30.940 trillion dong, up by 3.5 percent compared to the beginning of the year. Meanwhile, the outstanding loans to customers grew by nearly 2.6 percent compared to the beginning of the year to 22.388 trillion dong. PGBank’s customer deposits only increased by 4.4 percent compared to the beginning of the year to 24.381 trillion dong.
As of September 30th, the on-balance sheet bad debts of PGBank were 694 billion dong, up by 6.2 percent compared to the beginning of the year. In particular, the debt group 5 irrecoverable debts were 500 billion dong, accounting for 72 percent of the total bad debts. Accordingly, the ratio of bad debts on total outstanding customer loans increased from 2.96 percent to 3.07%.
It is known that PGBank’s divestment roadmap has been developed by Petrolimex Group since 2015 when it signed a contract with Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank). However, in April 2018, PGBank signed a contract to merge into HCM City Development Commercial Joint Stock Bank (HDBank) and was approved in principle by the State Bank of Vietnam (SBV). The merger deal is expected to be completed in June 2020.
While banking stocks have been traded actively, shares of Petrolimex Group Commercial Joint Stock Bank (PGBank) has also seen no transactions on the OTC market.
An expert said that the reason investors are still wary of PGBank shares is that the growth of financial activities of the bank is much lower than the common level of the banking system. Moreover, since the merger of PGBank and HDBank has lasted for a long time, investors are cautious about this stock.
