VN banks make big profits but share prices fall

Despite good business results, 11 out of 17 listed commercial banks saw share prices decrease in the first half of the year.

The first Q2 financial reports have been released by banks, and most reported satisfactory profits.

VN banks make big profits but share prices fall



Vietcombank (VCB) reported pre-tax profit of VND11.28 trillion, an increase of 40.7 percent over the same period last year, fulfilling 55 percent of the yearly plan.

The holding bank alone reported the profit of VND11.045 trillion, up by 43.1 percent

Commenting about banks’ profit growth cycle, analysts said the peak of the cycle came in 2017-2018, and the banking sector had entered the stable growth period. The ROAA and ROAE indices were 1.62 percent and 25.19 percent, respectively.

Other large banks also reported record high profits. At a meeting with investors, a representative of ACB said the bank has made 49 percent of the yearly pre-tax profit, with VND3.62 trillion.

Commenting about banks’ profit growth cycle, analysts said the peak of the cycle came in 2017-2018, and the banking sector had entered the stable growth period. The ROAA and ROAE indices were 1.62 percent and 25.19 percent, respectively.

 As of the end of June the total assets of ACB had reached VND352 trillion and the bad debt ratio 0.7 percent. The State Bank allowed it to lift the credit growth ceiling from 13 percent to 17 percent. In the first half of the year, its outstanding loans increased by 9 percent, or VND20 trillion.

 

Banks not only reported fat profits, but also made significant progress in settling bad debt. At Sacombank, the pre-tax profit hit VND1.5 trillion in the first six months of the year m, and the bad debt ratio decreased from 2.11 percent to 1.96 percent.

The bank collected VND11 trillion worth of bad debts in the first half of the year. It has collected VND35.7 trillion since it began implementing the restructuring plan.

Small banks also reported impressive profits. TP Bank, for example, had profit of VND1.62 trillion, in the first half of the year, or VND596 billion higher than the same period last year.

Surprisingly, the good business results did not push the bank share prices up. Eleven out of 17 banks saw the share prices decrease in the first six months of the year.

Meanwhile, in the second quarter, price decreases occurred at 14 banks.

The sharpest price decrease was seen with TCB shares of Techcombank (20 percent compared with the beginning of the year). LPB of LienViet Post Bank dropped by 11 percent in value.

Observers said the prices of most of the shares are hovering around VND20,000-VND30,000 per share. Only three banks, NVB, LPB and SHB, still saw the market price lower than the face value.

Though the bank share price decreased, analysts said that bank shares remained good securities to invest in. 

Kim Chi

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