Complex 2023 fails to dent bank objectives
Complex 2023 fails to dent bank objectives
Vietnam’s banking sector could face a dip in asset quality but anticipates a more favourable environment in 2024 in general, with a forecasted growth in pre-tax profits.
State Bank of Vietnam Deputy Governor Pham Quang Dung, who previously served as the chairman of Vietcombank, announced last week that Vietcombank’s pre-tax profit for 2023 successfully met its targets.
Vietcombank’s pre-tax profit for 2023 stood at an impressive $1.7 billion, marking an increase of over 10 per cent from the previous year.
VietinBank, while keeping specific figures under wraps, stated that its profits have “exceeded our planned objectives”.
Earlier, the bank had projected a profit of $949 million, representing a 10.5 per cent rise from 2022.
BIDV reported a robust pre-tax profit of $1.16 billion, growing over 19 per cent compared to the previous year.
Agribank’s CEO, Pham Toan Vuong, shared a significant achievement, stating, “For 2023, we anticipate a pre-tax profit around $1.07 billion, crossing the $1 billion mark for the first time. This figure is a monumental milestone for Agribank.”
Reflecting the robustness of the sector, all four state-owned banks maintained a strong double-digit growth rate.
MB, in its preliminary report, indicated a consolidated profit of $1.1 billion for 2023, which is a 15 per cent increase from the previous year. This outstrips the early profit figures of both VietinBank and Agribank.
Meanwhile, Techcombank saw a 10 per cent dip in its profits for 2023, with earnings of nearly $966 million. Despite this, the bank achieved its annual financial goals, though its after-tax profit fell to about $767 million, a decline of 11 per cent from the previous year.
VIB was the latest to join the ranks, with profits exceeding $422 million for 2023. Other banks like LPBank, TPBank, Eximbank, BAC A BANK, and PGBank reported preliminary profits of $295 million, $186 million, $114 million, $42 million, and $12 million, respectively.
MSB announced a commendable pre-tax profit of $246 million for 2023.
An MSB spokesperson stated, “Our strategic approach to managing bad debts has substantially strengthened our balance sheet amidst market challenges. The bank’s consolidated capital adequacy ratio improved to 12.76 from 12.33 per cent at the end of 2022.”
A significant contributor to MSB’s growth has been its digital initiatives.
“This year, we’ve fully digitalised the credit provision process for our corporate clients, significantly enhancing efficiency and customer experience,” the spokesperson explained.
The closing quarter of 2023 saw a mixed bag of results for Vietnamese banks, with some recording significant profit rebounds while others faced declines.
Techcombank announced its Q4 2023 business results, achieving a post-tax profit of $189.11 million a 25.5 per cent increase on-year.
However, due to lower performance in the preceding three quarters, Techcombank’s annual post-tax profit experienced a decrease of 11 per cent compared to the previous year, marking the first time in a decade that Techcombank has experienced a profit decline.
LPBank also reported its Q4 post-tax profit reaching $110.89 million, tripling its performance on-year.
Nevertheless, not all banks shared this upward trajectory. Eximbank and TPBank saw downturns in their Q4 profits, and PGBank recorded a loss.
PGBank was the sole bank to report a Q4 loss, at $194,000, contrasting sharply with a $4 million profit in the same period last year. Its annual post-tax profit was around $11.96 million, a decrease of 29.8 per cent from 2022.
Reflecting on the sector’s performance, MB Securities remarked, “2023 presented a complex scenario for the banking industry, with overall post-tax profits dipping by 2.5 per cent amid rising operating and provisioning costs.”
SSI Research offered a forward-looking perspective. “2024 will continue to challenge banks, particularly in asset quality. However, improvements in capital costs and pre-provision profits are expected to provide a more favourable environment compared to 2 023,” it said. “We anticipate a 15.4 per cent growth in pre-tax profits for the upcoming year, a significant leap from the 4.6 per cent growth seen in 2023.”
