Business results of small banks not as positive as large banks’

24-Jul-2019 Intellasia | Tri Thuc Tre | 6:02 AM Print This Post

The season for announcing 2019 semi-annual business results has started. Up to now, more than a dozen banks have released their official financial statements or their business results through a six-month preliminary review.

Among them, large banks continue to report increasingly large interests. Many banks posted record high results in the first six months (H1), namely Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Tien Phong Commercial Joint Stock Bank (TPBank), Military Commercial Joint Stock Bank (MB), Asia Commercial Joint Stock Bank (ACB) and Vietnam International Commercial Joint Stock Bank (VIB). Some other banks also achieved profit of up to a trillion dong such as HCM City Development Commercial Joint Stock Bank (HDBank), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), etc. A common point of this group is the significantly high profit growth compared to the same period of last year.

In the group of small banks, the business results are not as positive as large banks’. So far, only Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) posted better profit results, while Kien Long Commercial Joint Stock Bank (Kienlongbank) and Bac A Commercial Joint Stock Bank (BacABank) attained similar profits to the same period of 2018. Saigon Commercial Joint Stock Bank for Industry and Trade (Saigonbank) and Petrolimex Group Commercial Joint Stock Bank (PGBank) both saw profit decline.

Specifically, in H1, Kienlongbank recorded a pre-tax profit of more than 148 billion dong, just equivalent to the same period of last year. In which, the bank’s profit in the second quarter (Q2) slightly declined by 4.5 percent compared to the same period of 2018, reaching 74 billion dong. The reason for this situation is the sharp rise of operating expenses, although the income from the bank’s operation saw improvement.

By the end of Q2 2019, the total assets of Kienlongbank reached 47.670 trillion dong, up by 12.7 percent compared to the beginning of the year. The bank’s outstanding loans to customer only increased by 5.3 percent, equivalent to 1.544 trillion dong, reaching 30.761 trillion dong. The capital mobilisation of Kienlongbank also went up by 5.3 percent to 30.759 trillion dong. The bad debt ratio accounted for 1.15 percent of the total outstanding credit to customers with an absolute number of 357 billion dong.

For Saigonbank, as the bank is in the process of focusing on restructuring and settling bad debts, its business activities in H1 significantly declined compared to the same period of last year. In the first six months of the year, the bank recorded a net interest income of 316 billion dong, down by 3.2 percent over the same period of 2018. Other business activities of Saigonbank also decreased, while its operating costs rose up by three percent, resulting in a 30 percent drop in net profit, equivalent to 132.6 billion dong.

Thanks to the significant reduction in risk provisioning compared to the same period of 2018, Saigonbank’s pre-tax profit only declined by 21 percent to 88 billion dong. However, it is notable that the banks Q2 profit was just above 14 billion dong the second consecutive quarter of decline.

By the endo June 30th 2019, the total assets of Saigonbank were 21.291 trillion dong, up by 4.5 percent compared to the beginning of the year. The bank’s outstanding credit was posted at 14.181 trillion dong, up by 3.73 percent. The on-balance sheet bad debt ratio was 2.25 percent.

Meanwhile, BacABank’s financial statement showed a H1 pre-tax profit of 436 billion dong, just two billion dong higher than the same period of last year.

The total operating income of BacABank was lower than the same period. The reason came from the less positive trading of securities and income from other activities, with respectively just 0.8 billion dong and 17.6 billion dong of profit, down by up to 99 percent and 77 percent compared to the same period of 2018. The bank’s profit from foreign exchange trading also fell by 19 percent, reaching seven billion dong; while the income from capital contribution to buy shares dropped by 41 percent, reaching only six billion dong. Although the net interest income of BacABank grew, it is not impressive with only 5.7 percent, reaching 943 billion dong. The biggest bright spot is the profit of service activities with 54 billion dong, up by 80 percent.

Due to the reduction in total operating income, the bank’s profit in H1 is only equivalent to the same period of 2018, although its operating costs only inched up by 9.2 percent to 477 billion dong and the provisioning costs even dropped sharply by 46 percent to 114 billion dong in the period.

By the end of June 2019, the total assets of BacABank were more than 100 trillion dong, up by 5.1 percent over the beginning of the year. In particular, lending to customers increased by 8.3 percent to 68.622 trillion dong, and capital mobilisation increased by 6.2 percent to 77.034 trillion dong. The bank’s bad debt ratio was 0.72 percent.

PGBank is waiting to be merged with HDBank. The banks has also published its financial statement with Q2 pre-tax profit reaching only eight billion dong, down by nearly half compared to the same period of 2018. In H1, PGBank’s pre-tax profit was 94 billion dong, down by five percent over the same period of 2018.

Most of PGBank’s business activities were less optimistic in the last six months. In which, the net interest income slightly decreased by one percent with only 430 billion dong. The bank’s service income fell by 19 percent to 16 billion dong, and the income from foreign exchange trading also dropped by eight percent to 26 billion dong.

By the end of June, the total assets of PGBank were 28.211 trillion dong, down by 5.6$ compared to the beginning of the year. In particular, lending to customers just slightly increased by 1.2 percent to 22.080 trillion dong. The bank’s deposits at the State Bank of Vietnam (SBV) significantly fell by 70 percent to 580 billion dong. PGBank’s capital mobilisation from customers decreased by 7.8 percent to 21.519 trillion dong. The bank’s bad debt ratio rose up from 2.96 percent to 3.06 percent.

VietBank is the only bank that recorded good profit growth with 250 billion dong in six months, up by 24 percent compared to the same period of 2018. The bank’s profit increase is not only thanks to some positive business activities but also thanks to the 84 percent reduction in provisions for risks compared to the same period of 2018.

Specifically, in H1, VietBank’s net interest income was 590 billion dong, up by 8.9 percent over the same period of 2018. Its service activities recorded a profit of nearly 13 billion dong, doubling the same period of 2018. Income from other activities rose up by more than 4.5 times to 59 billion dong. The bank’s foreign exchange and securities trading was less positive with profit of respectively eight billion and 51 billion dong, down by 32 percent and 66 percent over the same period of last year, respectively. VietBank’s total operating income was 721 billion dong, slightly down compared to the 725 billion dong recorded in the same period of 2018.

VietBank’s operating costs increased by 17 percent to 450 billion dong. Meanwhile, the risk provisioning expenses dropped by 84 percent to 21.5 billion dong. By the end of June 2019, the bank’s total assets grew by 9.5 percent to 56.603 trillion dong. In particular, the outstanding lending to customers increased by 5.8 billion dong to 37.242 trillion dong while capital mobilisation increased by 7.3 percent to 42.771 trillion dong. The bank’s bad debts accounted for 1.14 percent of the total outstanding credit.

 


Category: Finance, Vietnam

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