This is the main reason why Vietnam Public Joint Stock Commercial Bank (PVcomBank) recorded a sharp decrease in profits in the second quarter. According to PVcomBank's explanation, the reason is that the Bank has restructured its profitable assets, restructured its investment portfolio of both stocks and bonds, so net income from securities activities increased, and at the same time, it added provisions for credit risks, so the cost of credit risk provisions increased.

In the first 6 months of the year, PVcomBank achieved VND 69,675 billion in consolidated pre-tax profit, up 58% over the same period last year. Although in the second quarter of 2024, consolidated pre-tax profit was negative VND 239,578 billion. With this result, PVcomBank ranked 27th in terms of 6-month profit out of 30 commercial banks that have published financial reports.

Thanks to a sharp reduction in deposit interest expenses, PVcomBank earned more than VND1,000 billion in semi-annual net interest income, 6.5 times higher than the same period last year, including nearly VND763 billion in net interest income in the second quarter alone, 4.9 times higher than the same period, thereby recording strong growth in core business activities.

However, interest expenses increased by 32% to VND8,255 billion. Revenue from service activities in the first 6 months of the year also decreased sharply by 36%, reaching only VND120 billion.

In addition, the bank also increased non-interest income sources with net interest income from services reaching nearly VND66 billion, up 2% over the same period thanks to reduced costs for payment, trust and agency operations.

Meanwhile, money spent on employees and public administration activities of PVCombank in the first half of this year increased to VND1,771 billion, up 13% over the same period.

As of June 30, employee expenses increased by 11% to over VND998 billion compared to the same period last year. The average expenditure per capita at PVCombank in the first 6 months of the year was VND25 million/person/month, including salary, bonus and salary-based contributions.

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PVcomBank is the only bank reporting a loss in the second quarter of 2024. Photo: Tung Doan

According to the report, PVcomBank's customer loans as of June 30, 2024 reached VND 103,836 billion, an increase of 5.54% compared to the end of 2023.

Bad debt has decreased from 4% at the end of 2023 to 3% as of June 30, 2024. However, group 5 debt (debt with the possibility of losing capital) increased by nearly 17% to VND 2,840 billion.

Analyzing outstanding loans by industry, PVcomBank prioritizes capital for the real estate sector with outstanding loans of approximately VND 30,000 billion, accounting for 28.8% of total outstanding loans (the proportion of real estate loans by the end of 2023 is 15.6%).

While credit growth was only 5.54%, customer deposit mobilization at PVcomBank decreased by 1.45% compared to the end of 2023, reaching VND 175,583 billion. Of which, the CASA ratio, although increasing by 17%, only accounted for 6% of total customer deposits. The low CASA ratio puts PVcomBank at a disadvantage compared to competitors in reducing capital costs.

PVcomBank is among the youngest commercial banks in Vietnam, established in 2013 on the basis of the merger between Vietnam Oil and Gas Finance Joint Stock Corporation (PVFC) and Western Commercial Joint Stock Bank.

PVcomBank currently has a charter capital of VND9,000 billion, of which the Vietnam National Oil and Gas Group (PVN) contributes 52%. Strategic shareholder Morgan Stanley holds 7% of the bank's charter capital.

The bank has 3 subsidiaries: Petroleum Securities JSC (PVcomBank holds 51% of capital), PVcomBank Fund Management JSC (99.97%), PVcomBank Debt Management and Asset Exploitation LLC (100%).