Agribank becomes "runner-up" in banking industry profit after 9 months

The Bank for Agriculture and Rural Development (Agribank) has just announced its business results for the third quarter and the first 9 months of 2023.

Accordingly, in the third quarter of 2023, Agribank recorded net interest income of VND 11,320 billion, down 23% year-on-year. During the period, the bank reduced its credit risk provisioning costs to VND 2,161 billion. As a result, the bank reported pre-tax profit of VND 8,362 billion, double that of the same period last year.

Accumulated in the first 9 months of the year, Agribank had net interest income of VND 41,016 billion, down slightly by 4% compared to the first 9 months of 2022.

Accumulated pre-tax profit reached VND21,860 billion, up 13.8% over the same period. With this profit, Agribank rose to the second position in the system in terms of profit, just behind Vietcombank with a profit of VND29,550 billion.

The increase in profit was largely due to a decrease in provision expenses to VND11,006 billion. In addition, some of the bank's business segments performed poorly, dragging down total operating income.

Specifically, net profit from banking services decreased by 11.7% year-on-year to VND3,387 billion. Profit from other activities (mainly from debt settlement) decreased by 17.5% to VND6,625 billion.

In contrast, the bank's profit from trading securities increased by 10.6% to VND22 billion. Foreign exchange trading was also positive, reaching VND1,530 billion, up 47.5%.

In the first 9 months of the year, Agribank's operating expenses decreased by 2.5% compared to the same period last year, down to VND19,809 billion. Agribank has significantly cut employee expenses, from VND12,023 billion in the first 9 months of 2023 to VND10,940 billion in the first 9 months of 2023, a decrease of 9%. Of which, salary and allowance expenses decreased by 9.9% to VND9,644 billion.

During the period, the bank's net cash flow was VND1,959 billion, showing a positive improvement compared to the negative cash flow of VND17,366 billion in the previous year. This mainly came from the reversal from negative to positive operating cash flow, from negative VND17,123 billion to VND9,245 billion.

However, operating cash flow decreased by 5.8% to VND37,719 billion. In particular, cash flow from financial activities plummeted from VND95 billion to negative VND6,745 billion.

As of September 30, 2023, Agribank's total assets reached more than VND 1.9 million billion, a slight increase compared to VND 1.87 million billion at the beginning of the year. Outstanding loans to customers increased by 3.5% to more than VND 1.49 million billion. Customer deposits increased by 10% to more than VND 1.73 million billion.

Regarding debt quality, Agribank's bad debt increased by 11.8% in the first 9 months of the year to VND29,133 billion. Of which, group 3 and group 4 debt recorded increases of 40.7% and 89.9% to VND5,569 billion and VND6,036 billion, respectively.

In a related development, at the same time as announcing its business results, Agribank was approved by the State Securities Commission to offer bonds to the public. Accordingly, Agribank plans to offer 100 million bonds with a face value of VND100,000/bond. The total issuance value is VND10,000 billion.

The bonds have a term of 8 years and are expected to mature in 2031. The floating interest rate is determined by the reference interest rate formula plus a margin of 2%/year.

The purpose of issuing the bond lot is to increase Tier 3 capital to meet the safety ratios of the bank's operations as prescribed by the State Bank and increase the scale of operating capital, meeting the lending needs of the economy in general, focusing on medium and long-term investment projects.

The minimum purchase registration quantity is 1 bond and the registration period is from November 13, 2023 to December 5, 2023 .

Thu Huong

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