Banks gain large profits from securities investment in 2023

Feb 1st at 10:11
01-02-2024 10:11:20+07:00

Banks gain large profits from securities investment in 2023

Profits from securities investment and trading activities of commercial banks increased sharply in the last quarter of 2023 as interest rates fell significantly.

Bắc Á Bank’s transaction office in Hà Nội. Profits from investment and trading securities accounted for 49 per cent of Bắc Á Bank's non-interest income in 2023. — Photo

At commercial banks, the investment portfolio is mostly Government bonds, with prices fluctuating inversely with interest rates. In 2023, interest rates decreased sharply from the beginning of the year, so Government bond prices increased sharply and brought in big profits to banks.

According to financial statements of banks, the total net profit from securities investment of 12 banks in Q4 2023 increased by 195 per cent to more than VNĐ5.6 trillion, while trading securities also brought in more than VNĐ300 billion. The two business segments contributed more than half to the growth of the banks' total operating income.

Among the banks, ACB recorded a sudden increase in net profit from securities investment, bringing in more than VNĐ2.65 trillion against only VNĐ21 billion in the same period of 2022. Securities trading also contributed nearly VNĐ170 billion.

Both securities investment and trading activities contributed up to 36 per cent of ACB's non-interest income. It was notable as the loss from the above two business segments of the bank in 2022 was equivalent to 7 per cent of non-interest income.

At Bắc Á Bank, profits from securities investment in the fourth quarter of 2023 increased three times against the same period of the previous year, helping the bank’s profits increase by 60 per cent in the fourth quarter. This business segment accounted for 49 per cent of Bắc A Bank's non-interest income in 2023.

Profits from securities investment of Techcombank and TPBank doubled last year, bringing in VNĐ926 billion and VNĐ856 billion, respectively.

On average, the contribution of securities trading and investment of the 12 banks increased from 4 per cent of total non-interest income in 2022 to 15 per cent in 2023.

For some banks such as NCB and Bắc A Bank, securities trading activities have the largest contribution to their non-interest income.

However, experts forecast it will be difficult for banks to maintain the big profits from securities investment and trading in the coming quarters as there is not much room for the State Bank of Vietnam (SBV) to further reduce its policy interest rates in the context that the SBV wants to stabilise inflation and foreign exchange rate. 




Market corrects deeply on rising selling force

Shares inched lower on Wednesday as pillar stocks faced a strong sell-off, while foreign investors continued to net buy on the market.

The upward wave of steel stock prices

Steel stock prices have skyrocketed in 2023 and are projected to continue their strong upward trend in 2024, driven by robust public investments and a flourishing...

Market finishes higher despite low liquidity

The Vietnamese stock market inched higher on Tuesday but gains were capped by losses in the big three banks.

VN-Index stable due to rising selling force

The selling pressure weighed on the market in the first trading day of the week, with the benchmark VN-Index being stable while foreign investors net sold on two...

Market expected to continue recovery

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange rose 0.45 per cent to close at 1,175.67 points.

Shares rebound following a three-day downturn

Friday saw a resurgence in the VN-Index following a three-day downturn, primarily attributed to the recovery of several prominent large-cap stocks.

Banking stocks' slump drives modest decline in overall market

The stock market experienced a minor decline on Thursday as a result of the downward trend observed among prominent banking stocks within the large-cap category.

SSC fines individuals, organisations for violating securities activities

Since early this year, the State Securities Commission (SSC) has fined individuals and organisations for administrative violations, including illegal trading and...

Cash dividends from banks boost investor interest

News of many banks planning to pay dividends, especially cash dividends, have attracted attention from investors in the first month of the New year.

Stock market experiences a decline as blue-chips end lower

Shares ended lower on Wednesday, primarily driven by selling pressure that emerged towards the end of the trading session, particularly affecting various large-cap...



Back To Top