VN banks still living on credit
Most banks made fat profits in 2019 and some of them had profit of over tens of trillion of dong. But their profits mostly came from lending.
More banks have published their 2019 finance reports and the number of banks reporting fat profits has increased. Some banks saw the profit soaring by 70 percent.
The profits by some commercial banks in 2019
The list of banks making the profit of over VND10 trillion in 2018 only comprised two names – Vietcombank (VND18.269 trillion) and Techcombank (VND10.661 trillion). Meanwhile, seven banks have reported the profit exceeding VND10 trillion for 2019 so far.
With VND23.123 trillion worth of pre-tax profit, an increase of 14 percent compared with 2018, Vietcombank is leading the banking system in terms of profit. The No 2 still belongs to Techcombank with VND12.838 trillion worth of pre-tax profit, up by 20.4 percent over the previous year.
|With VND23.123 trillion worth of pre-tax profit, an increase of 14 percent compared with 2018, Vietcombank is leading the banking system in terms of profit. The No 2 still belongs to Techcombank with VND12.838 trillion worth of pre-tax profit, up by 20.4 percent over the previous year.|
As the third most profitable bank, VietinBank has caught attention from the public.
Since it cannot raise the chartered capital and therefore cannot expand credit, the bank only set a modest profit target of VND9.5 trillion for 2019. But the result was better than expected with pre-tax profit of VND11.78 trillion, up by 79.6 percent over 2018.
With the encouraging result, VietinBank surpassed rivals and jumped from the seventh to the third position in the list of most profitable banks.
The strong rise of VietinBank led to BIDV falling one grade to the fourth position in the list with VND10.876 trillion in pre-tax profit, an increase of 15.8 percent compared with 2018.
The fifth position belongs to VP Bank, VND10.334 trillion, up by 12.34 percent, followed by Military Bank VND10.036 trillion, up by 29.21 percent.
In 2019 the strong rise of middle-class banks occurred. TP Bank has surprised investors with the profit increasing sharply by 71.3 percent in 2019 to VND3.868 trillion. VIB Bank also reported a sharp increase of 49 percent in profit in comparison with the previous year to VND4.082 trillion.
Dien Dan Doanh Nghiep commented that private banks seem to outperform state-owned banks in terms of business efficiency.
Techcombank is No 1 with the ROA index of 3.35 percent, followed by VP Bank with 2.74 percent, Military Bank 2.44 percent, TP Bank 2.35 percent and VIB with 2.21 percent.
Among state-owned banks, Vietcombank has the highest ROA, but it is just 1.89 percent.
Analysts commented that credit remains the business division which has led to the biggest contribution to banks’ profit and revenue.
Vietcombank’s outstanding loans in 2019 reached VND734.707 trillion, or VND102.8 trillion higher than 2018. The figure is higher than the total outstanding loans of many small banks. Thanks to this, the bank’s net interest margin was high at VND34.577 trillion in 2019, up by 21.7 percent.
The State Bank of Vietnam made a net cash withdrawal worth VND86 trillion out of the economy through open market operations (OMO) from January 20 to February 14.
Some commercial banks have announced lower lending interest rates to help their clients overcome the difficulties caused by coronavirus (Covid-19) crisis.