Banking industry profits lowest in 10 years

On the evening of April 8, the Securities Research Division of VPBank Securities Joint Stock Company (VPBankS Research) reported on the banking industry in 2024 with many notable contents.

According to VPBankS Research, by the end of 2023, listed banks in Vietnam will have completed an average of 85% of their pre-tax profit plan. However, only 10/27 banks will have achieved 100% of their pre-tax profit plan.

In 2023, pre-tax profits of banks will only grow by 3.8% compared to the previous year, the lowest increase in the past 10 years.

Banking industry profits increased by only 3.8%, the lowest in the past 10 years. (Illustration photo: D.V)

“In 2024, we forecast that pre-tax profit of the entire banking industry will grow by 15% compared to the previous year, equivalent to VND293,650 billion, assuming that the State Bank does not increase interest rates and major banks push up 90% of the credit room assigned from the beginning of the year,” VPBankS Research informed.

Also according to VPBankS Research, the bright spot of credit growth in 2023 is the excellent completion of 13.78% above the target of 14% in the context of "gloomy" credit. Banks have had a breakthrough in the fourth quarter of 2023 with impressive credit growth. Typically: ACB increased from 8.7% in the third quarter to nearly 18% in the fourth quarter; HDBank from 11.5% to 31.8%; VPBank from more than 17% to 26%...

This shows that consumer confidence is gradually recovering and credit demand from business households is increasing.

The report stated that in 2024, the credit growth target is 15% and is assigned to banks to maximize flexibility. Therefore, VPBankS Research believes that with the scenario that banks are pushed to about 90% of credit room, credit growth in the year will reach about 14.83%.

According to the research unit, in 2024, asset quality is expected to remain stable because the average bad debt ratio of listed banks is at 2% but the on-balance sheet bad debt of the credit institution system by the end of 2023 is 4.55% (up from more than 2% at the end of the previous year).

The increase is mainly due to the heavy impact of the SCB and Van Thinh Phat incidents. This is an event that requires the cooperation of the entire industry to resolve and handle, so it will have a general impact on the industry's asset quality in the coming time.

According to VPBankS Research, the banking industry in Vietnam will continue to face difficulties in the first 6 months of the year and the situation will gradually improve in the second 6 months of 2024. This prediction is based on expectations of an improvement in NIM (net interest margin) due to low interest rates reducing capital costs and motivating lending from foreign investors.

In addition, the world's import and export demand is gradually recovering and domestic borrowing demand is also progressing well. Banking stocks recommended by the research unit include: VCB, BID, CTG, VPB, MBB, VIB.

DAI VIET

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