In the first quarter of 2022, private bank VPBank surpassed Vietcombank to become the most profitable bank in Vietnam, with more than 11.1 trillion VND of profit, up nearly 2.8 times over the same period of 2021.

Vietcombank recorded a profit of nearly 10 trillion VND during this period, up 15% year on year. Techcombank was in third place with nearly 6.8 trillion VMD, followed by MBBank with over 5.9 trillion VND and VietinBank with more than 5.8 trillion VND. Despite the deterioration in asset quality, the banking industry's profit in the first quarter of the year maintained double-digit growth.

In the first quarter 2022, the banking system recorded a new race in profit with the change of thrones in many positions. Many state-owned banks have been downgraded and are showing signs of running out of breath in the renovation process.

While the Bank for Foreign Trade of Vietnam (Vietcombank) lost the top spot in terms of profit, the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) and the Vietnam Bank for Investment and Development (BIDV) also made way for the Vietnam Technological and Commercial JS Bank (Techcombank) and the Military Commercial Joint Stock Bank (MBBank). Remarkably, many banks recorded a sharp increase in profits thanks to fees from the exclusive cooperation agreement to distribute insurance between banks and insurance companies.

After years of stagnation due to internal conflict, the Vietnam Export Import Commercial Joint Stock Bank (Eximbank) has come back and led the profit growth rate in the first quarter.

Regarding restructuring activities, the State Bank of Vietnam has set plans to handle two "zero VND banks" – Construction Bank (CBBank) and Ocean Bank (OceanBank). Vietcombank and MBBank were selected to participate in the restructuring of these two weak banks.

Assets increase sharply

Big banks still maintain their strength in assets. By the end of March 2022, the top 10 banks with the largest assets owned more than 8.78 quadrillion VND, accounting for more than 77% of the whole system.

BIDV, VietinBank, and Vietcombank ranked first with assets ranging from 1.46 quadrillion VND to nearly 1.85 quadrillion VND. In the race for assets, MBBank and Techcombank rose strongly. MBBank ranked 4th with 649 quadrillion VND, followed by Techcombank with 615.2 quadrillion VND.

VPBank, Sacombank, ACB and Saigon Hanoi Bank (SHB) have assets of over 500 trillion VND.

In the top group for assets, Vietinbank, Techcombank, MBBank have the high asset growth rate, from 8-9%.

The top banks in terms of assets also attracted the most deposits. In the first quarter of 2022, the top 10 banks attracting the most customer deposits held 6.5 quadrillion VND of customer deposits, accounting for nearly 79%.

BIDV continued to hold the top position with more than 1.39 quadrillion VND in customer deposits, followed by VietinBank with over 1.21 quadrillion VND, and Vietcombank with 1.18 quadrillion VND.

In terms of deposit growth, VPBank ranked No. 1 with 13.4% (over the same period). HDBank was in second place with a 9.9% increase in deposits, followed by TPBank with 9.3%. VietinBank and Vietcombank had a rather low growth rate, around 4%.

While the stock market was surrounded by bad news domestically and internationally, the banking group is considered to be a bright spot and a self-fulfilling point for the stock market of Vietnam in 2022. This is also a major contributor to the stock market's profits, with about 40%. Currently, valuation of bank shares by price/book value (P/B) criterion is at the lowest level since 2015.

According to a report of SSI Securities, net interest margin (NIM) of some banks increased slightly compared to the previous quarter, ranging from 2.4 - 7.6%. Some banks also benefited from a significant increase in term deposits from the State Treasury and improved current account savings account (CASA) compared to the previous quarter.

Recently, deposit interest rates tend to increase. This may affect the business results of banks. However, some experts believe that lending interest rates may also increase accordingly. 

SSI also said that the positive business results of Vietnamese banks in Q1/2022 did not fully reflect the impact of recent moves to tighten real estate lending and corporate bonds.

M. Ha