BVBank reports 2023 profit down 84% year-on-year

Bao Viet Commercial Joint Stock Bank (BVBank - UPCoM: BVB) has just announced its business results for the fourth quarter and the entire year of 2023. Notably, BVBank ended the fourth quarter of 2023 with a pre-tax profit of VND 10 billion and a corresponding after-tax profit of nearly VND 8 billion, both down sharply by nearly 70% over the same period, recording the lowest profit in the past 8 quarters of the bank.

On the other hand, BVBank recorded positive net interest income, increasing by 10% compared to the same period last year to VND428 billion. The bank's non-interest income sources also increased and decreased inconsistently. Specifically, BVBank's service activities brought in a loss of more than VND830 million while in the same period it earned a profit of VND23 billion.

Net profit from foreign exchange trading activities reached VND1.6 billion while in the same period last year, there was a loss of VND23 billion. Notably, net profit from trading investment securities also increased to nearly VND38 billion, up 7.6 times compared to the same period last year; net profit from other activities reached VND46 billion, up 86% compared to the same period last year.

During the period, the bank increased its risk provisioning expenses to VND135 billion, up 33.7% compared to the expense of VND1,012 billion in the same period last year. This is also one of the reasons that dragged down BVBank's profits.

Accumulated for the whole year of 2023, BVBank recorded its main source of revenue as net interest income reaching nearly VND 1,479 billion, down 14% compared to the previous year. The bank's non-interest income sources also fluctuated erratically, with a bright spot being the net profit from investment securities trading activities reversing from negative to positive, from a loss of nearly VND 5 billion last year to a profit of VND 122 billion.

Profits from other activities such as services and foreign exchange trading showed a decline. Of which, net profit from services decreased by 45% compared to the previous year to VND54 billion; net profit from foreign exchange trading decreased by 48% to VND22 billion.

Meanwhile, the bank increased operating costs to nearly VND1,407 billion, up 14% compared to last year, and risk provision costs increased 23% to VND276 billion.

As a result, BVBank reported pre-tax profit of VND71.6 billion; corresponding after-tax profit reached VND56.5 billion, down 84% compared to the previous year. In 2023, BVBank set a pre-tax profit target of VND502 billion. Thus, at the end of the year, the bank only achieved 14% of the set target.

BVBank said that 2023 is considered a year with many difficulties affecting the economy. Following the direction of the State Bank, the bank has continuously reduced lending interest rates to support customers facing difficulties. Although interest income in the fourth quarter and 2023 increased compared to the same period.

However, due to the high input capital costs due to the impact of market fluctuations from January 2022, interest expenses in the fourth quarter increased by 15% and in 2023 increased by nearly 43% compared to the same period last year. In addition, due to fluctuations in exchange rates, net profit from foreign exchange trading activities in 2023 decreased by 48% compared to the previous year.

As of December 31, 2023, BVBank's total assets were recorded at VND87,883 billion, an increase of 11% compared to the beginning of the year. Of which, customer loans increased by 14% compared to the beginning of the period, accounting for VND87,768 billion. Customer deposits also increased by 14% compared to the beginning of the year to VND57,138 billion.

Regarding debt quality, on the last day of 2023, BVBank's total bad debt was VND 1,915 billion, up 35% compared to the beginning of the year. As a result, the bad debt/loan balance ratio increased from 2.79% to 3.31% .

Source