Many bank stocks recorded positive growth in the last week, partly thanks to the good profit results in the second quarter (Q2) of 2020. However, experts warned that investors should be cautious before pouring capital.
Numerous bank stocks such as VIB, TPB, BID, ACB, VPB, STB, etc. prospered in the last week. According to Tien Phong Commercial Joint Stock Bank (TPBank, stock code: TPB), the bank’s profit grew by more than 25 percent (to over two trillion dong), thanks to the credit growth of 11 percent and the good growth of other segments such as guarantee, trade finance, insurance, cards, etc. all developed well, while the management costs were cut efficiently.
Vietnam International Commercial Joint Stock Bank (VIB) also achieved good profit results in the first six months of the year, with a credit growth of six percent and profit completing 52 percent of the year plan. Dang Khac Vy, Chair of the Board of directors (BOD) of VIB said that the positive profit result of the bank was thanks to the bank’s early move in reducing costs, investing in technology, completing the three pillars of Basle II, which resulted in a good cost of goods, etc.
Not many banks have officially released six-month business results, but the estimates released by leaders of many banks showed that the profit of many listed banks is still positive. They have basically completed 50 percent of the year profit plan, such as Asia Commercial Joint Stock Bank (ACB), Vietnam Prosperity Commercial Joint Stock Bank (VPBank, stock code: VPB), HCM City Development Commercial Joint Stock Bank (HDBank, stock code: HDB), Military Commercial Joint Stock Bank (MBBank, stock code: MBB), etc.
Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank, stock code: VCB) said that its profit in the first half of 2020 is equivalent to the profit in the same period of last year (11.3 trillion dong). Meanwhile, the business situation of Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank, stock code: CTG) began to prosper when its credit grew positively again after a period of negative growth.
Analysts of Saigon Securities Incorporation (SSI) estimated that among 10 bank stocks with large capitalisation on the stock market, nine stocks recorded positive profit results in Q2 2020, including ACB, CTG, HDB, HDB, MBB, TCB, TPB, VIB, VCB and VPB).
Specifically, SSI forecasted that ACB’s pre-tax profit in the first half of 2020 would reach over four trillion dong, up by more than 10 percent compared to the same quarter of 2019. VietinBank’s Q2 pre-tax profit was estimated at 3.030 trillion dong, up by 38.7 percent compared to the same period of last year. Meanwhile, with strong credit growth in Q2 2020, HDB is also estimated to attain 2.8 trillion dong of pre-tax profit in the first half of 2020, up by 26.7 percent compared to the same period of last year.
MBB’s profit is expected to level off or grow at a single digit number in Q2 2020, due to the credit growth of about four percent of the parent bank.
The profit of Vietnam Technological and Commercial Joint Stock Bank (Techcombank, TCB) is predicted to reach 5.1 percent in Q2, while VPB expects six trillion dong of profit in the first two quarters of 2020, up by eight percent compared to the same period, etc.
Investors should be cautious in making investment.
The good profit prospect has made many king stocks rise again. The purchasing power of many stock such as STB, VIB, ACB, etc. is fairly strong. In fact, so far, banks have been fending off fairly well with Covid-19 pandemic. In addition to some banks that managed to preserve profits and assets, some other banks have still maintained their profit growth, such as VIB, TPB, etc.
Nevertheless, according to securities companies, bad debts may soar in the near future, when the time of restructuring of the loans affected by Covid-19 ends. Therefore, banks’ profits in the last two quarters of the year may encounter unexpected things, and investors should be cautious when making investment.
According to statistics of Vietnam Securities Depository (VSD), in June 2020, the number of newly opened securities accounts of investors continued to increase sharply. The capital inflows from new investors are expected to support the market, contributing to the “rising wave” on the stock market in July 2020.
Nevertheless, talking to reporter of Bao Dau Tu, Phan Dung Khanh, Investment director of Maybank Kim Eng Securities Company said that the stock market is growth unsustainably with risks of slow economic recovery, while the stock prices in this period did not grow consistently, indicating that capital flows are poured into speculative channels.
According to Viet Dragon Securities Company (VDSC), if Covid-19 does not recur, investors will not overreact, but will still be cautious when making decisions, particularly when the market enters an empty zone of support information in August. Therefore, VDSC gave warning that investors should save a part of the purchasing power in case of a worse scenario.
In the context when many countries in the world have not yet been able to control the epidemic, the economic growth in the second half of 2020 will have to rely heavily on the domestic market, instead of exporting. The sectors that are expected to growth efficiently are consumption, construction, real estate, etc. The bank stocks having advantages in lending to these sectors will have good growth potential this year.
