Local banks have reported their revenues last year, mainly from retail banking activities and services, and the trend will continue this year, according to Dau Tu Chung Khoan newspaper.

Vietnam Prosperity Bank (VPBank) made VND25 trillion (US$1.1 billion) in revenue last year, up 48% over 2016. Of which, revenues from net interest and services grew 36% and 70% respectively and provisions that were redeemed soared 51% to more than VND8 trillion.

After deducting taxes, the bank reported the highest ever net profit of over VND6.43 trillion with 51% contributed by FE Credit, its consumer finance arm.

Last year, net revenue from fees of Technological and Commercial Bank of Vietnam (Techcombank) accounted for 23.32% of its total revenue, surging versus 2016 thanks to the growth of insurance commission and payment fees.

Bank for Investment and Development of Vietnam (BIDV) also registered year-on-year growth of 33% in retail credit, 20% in capital mobilization and 35% in net retail revenue.

According to a report by the National Financial Supervisory Commission (NFSC), consumer credits rose 65% last year compared to 50.2% in 2016. The ratio of consumer credit over outstanding loans grew from 12.3% in 2016 to 18% last year.

The report also showed that the proportion of State-owned commercial banks in the consumer credit market surged from 39% to 45.7%. Meanwhile, the market share of joint stock commercial banks and financial companies decreased slightly from 47% in 2016 to 42% in 2017.

Nguyen Van Thuy, deputy head of the General Supervision Board under NFSC, said consumer credit would continue to grow strongly in the coming time.

In addition to consumer credit, the cooperation between financial technology (fintech) companies and banks will boost the development of retail banking sector, and bring big profits to banks this year, said Nguyen Tri Hieu, an economic expert.

In 2017, banks gave their priority to private companies instead of State-run ones. Banks provided not only loans and services to large groups but also credit packages for contractors, distributors, material suppliers, insurance companies and customers of these firms.

VPBank general director Nguyen Duc Vinh said the bank has offered unsecured loans for these firms together with household businesses and individual customers as they have no assets used as collateral for loans.

Many banks have focused on SMEs and household businesses. However, the competition in this segment is not quite strong as the number of such entitles is increasing sharply.

SGT