Banks saw mixed 2023
Banks saw mixed 2023
Ho Chi Minh City-based lender Sacombank became the first bank to make its 2023 business results public last December, with an estimated pre-tax profit of $400.8 million, a 50 per cent jump on-year. Its total deposit volume surpassed $24.2 billion and its outstanding balance touched $20.5 billion.
The non-performing loans ratio was kept at 2 per cent. Sacombank was also the banking sector leader in terms of profit growth in the first three quarters of 2023 with a 66 per cent jump on-year.
At the Hanoi-based lender PVcomBank's 2023 summary meeting on December 22, Nguyen Viet Ha, the bank’s deputy director general revealed that the bank was expected to reach 129 per cent of its revenue target for the year, with a capital adequacy ratio exceeding 8 per cent.
The bank is set to rake in $634 million in revenue and $3.37 million in pre-tax profit, with consolidated revenue and pre-tax profit targets set at $656.4 million and $4.6 million, respectively.
When the banking sector's third-quarter (Q3) financial statements were announced, Ho Chi Minh City-based lender OCB reported strong profit growth at 47.8 per cent on-year, and Kien Long Bank saw a 24.6 per cent increase.
Some forecasts, however, paint a less upbeat picture, with several banks seeing a fall in profit.
Of the 28 banks that filed Q3 financial statements last year, eight banks failed to achieve even half of their full-year profit targets, with the majority attaining between 50-60 per cent.
Furthermore, many listed banks saw a lowered net interest margin (NIM), which reflects a bank's’ profitability, compared to one year ago.
Nguyen Huu Huan, head of the Faculty of Financial Markets at the Ho Chi Minh City University of Economics, said, "Banks have failed to see a boost in lending as businesses and individuals face multiple hardships. In addition, bad debts have increased, pushing banks to boost loan loss provisioning, causing a bigger dent in profits."
The Vietnam Investors Service and Credit Rating Agency has forecast that the banking sector’s profit will grow in 2024 thanks to higher NIM, as deposits with high interest rates from Q4 of 2022 expire and the demand for deposits increases in the low-interest environment.
This will allow for a significant reduction in borrowing costs for banks, and allied with surging credit demands thanks to the expected global economic rebound, should contribute to a boost in loan yields.
