return icon Vietnamnet.vn

The financial picture of Vietnam's 10 largest banks

VietNamNet Bridge - Profits from lending still make up a large proportion of banks’ total profits, but bad debt remains a problem.
VietNamNet Bridge - Profits from lending still make up a large proportion of banks’ total profits, but bad debt remains a problem.


{keywords}

Under a plan on applying Basel II standards on a trial basis, 10 commercial banks, namely BIDV, VietinBank, Vietcombank, Techcombank, ACB, VP Bank, MB, Maritime Bank, Sacombank and VIB, will finish the trial period in 2018.

Dau Tu Chung Khoan quoted Le Quang Hai, consultancy director of KTC Auditing, as commenting that the banks’ major income is still from lending.

VP Bank’s financial report showed its net profit in the first nine months of 2016 at over VND10 trillion, far higher than that of some commercial banks. The success is explained by the fact that VP Bank now owns a leading consumer finance company.

Profits from lending still make up a large proportion of banks’ total profits, but bad debt remains a problem.
VP Bank’s success in consumer finance could be a prompt for other banks to jump on the bandwagon. A joint venture between MB and a Japanese partner has been set up, while banks where the state holds controlling stakes are also considering joining the market.

Hai, after analyzing the financial reports of the 10 banks, found that VP Bank has the biggest margin between deposit and lending interest rates, 8 percent on average.

Meanwhile, the margin at Sacombank is 1.95 percent only.

The average interest rate gaps are now 3.3 percent for state-owned banks and 4.5 percent for joint stock banks.

However, at many banks, the proportion from non-credit activities has been increasing. Vietcombank had the lowest proportion of income from lending in the fourth quarter of 2016, at 74.6 percent. 

Its net profit from services was as high as VND2.1 trillion. It had VND1.85 trillion from foreign exchange trade and VND1.939 trillion from other activities.

Sacombank and Techcombank, which are among the best joint-stock banks, also have low proportions of income from lending. Sacombank earned VND500 billion from forex trading in the first nine months of 2016, equal to that of Vietinbank and BIDV – the two big banks owned by the state.

VIB, Techcombank and MB are joint stock banks which have relatively high ratios of net profit on outstanding loans – 4.5-4.9 percent, while the figure is just 3.3 percent for state-owned banks.

Of the nine banks which have released their updated financial reports (Maritime Bank has only released the 2015 finance report), Vietcombank is the ‘cleanest’ bank as it has bought back all the bad debts it sold to VAMC some years ago.

Meanwhile, bad debts still burden other banks. Dien Dan Doanh Nghiep reported that BIDV had to make provision of VND9 trillion against risks for loans, which is equal to more than half of the VND17 trillion of profit. 


related news

Thanh Mai

MORE NEWS

Hanoi to turn middle alluvium ground into park

One more park has been designed for Hanoians. However, it is still unclear when the project will appear, as a number of other projects are still on paper or pending.

Asian investors eye more M&A opportunities in Vietnam

Investors from Japan, the Republic of Korea (RoK), and Singapore are looking for more potential merger and acquisition (M&A) opportunities in Vietnam, pinning high hopes on the long-term growth prospects of the market.

Vietnam's fishery exports exceed 10 billion USD in 11 months

Fishery exports reeled in 10.14 billion USD as of November this year, up 27% annually, said the Ministry of Agriculture and Rural Development.

HCM City want foreign doctors to be fluent in Vietnamese

The HCM City Department of Health has just proposed that foreign doctors should be fluent in Vietnamese if they want to work in the country.

Use of toxic e-cigarettes among students on the rise

After a trial smoke, T lost consciousness, was foaming at the mouth, and his limbs were curled up. Two days later, T regained consciousness at the hospital, but was still in the status of extreme fear.

Vietnam spends US$7.74 billion importing petroleum products

Vietnam imported over 7.5 million tonnes of oil and petrol worth around US$7.74 billion as of mid-November, up 24.1% in volume and 122% in value year on year, according to the General Department of Vietnam Customs.

Vietnam won’t sacrifice the environment for economic growth: Prime Minister

Vietnam takes people as the goal in development. People will enjoy the fruits of a green economy and the government will not sacrifice the environment to pursue economic growth.

Vietnam’s bond market contracts amid monetary tightening

After strong growth in the previous quarter, Vietnam’s currency bond market contracted 0.2% due to a decline in the Government bond market and slower growth in corporate bonds.

AI used to predict renewable-energy capacity

Wind and solar power will account for an increasing proportion of Vietnam’s total electricity capacity.

Infrastructure pinpointed to spur socioeconomic fortunes

The Vietnamese government is continuing to promote infrastructure development with the construction of expressways and new bridges, in efforts to spur socioeconomic development and welcome new private investment.

Budget resolutions set plan for 2023

Vietnam’s state budget performance is expected to see a deficit of billions of US dollars this year, with such a landscape fixed for next year – with warnings sounded about punishing violations in budget management and usage.

Vietnam fruit exported to new markets

2022 has been a successful export year as Vietnam’s farm produce has accessed many international markets.

Colourful beauty of Lo Lo ethnic costumes

Living at the foot of Rong (Dragon) Mountain in Lung Cu Commune, Dong Van District, Ha Giang Province, the Lo Lo ethnic community have effectively preserved their traditional culture, including their attire.

Sapa forecasted to experience frost

Mount Fansipan in the northern province of Lao Cai’s Sapa Town has been forecasted to see frost in the coming days as temperatures fall below zero degrees centigrade.

Dortmund footballers excited to discover Hanoi

Following their arrival in Hanoi, players of Bundesliga FC Borussia Dortmund enjoyed a cyclo tour around the Vietnamese capital and explored some famous sightseeing spots ahead of their friendly match against hosts Vietnam on November 30.
back_to_top