According to the State Bank, the income-cost gap of the credit institution system has tended to increase in recent times (in 2022, it increased by 10% compared to 2021).
Vietcombank leads the bank profit rankings in the first quarter of 2023
However, the growth rate of the income-cost gap is lower than the growth rate of total assets and equity, so the ROA (return on assets) and ROE (return on equity) of the banking system decreased compared to 2021, reaching 1.13% and 14.67% as of December 2022.
The State Bank of Vietnam's 2023 inspection plan focuses on specialized inspections of issues with high potential risks in the operations of credit institutions. In the first quarter of 2023, the Banking Inspection and Supervision Department conducted 371 inspections and examinations; issued 69 decisions on administrative sanctions.
Regarding the income structure of credit institutions, income from credit activities contributes mainly to the total income of credit institutions (accounting for 79.6% of total income). Income from non-credit activities plays an increasingly important role in the operation of the credit institution system. Accordingly, the proportion of income from non-credit activities compared to the total income of the whole system has tended to increase gradually in recent times.
However, interest receivable from credit activities at the end of 2022 increased by 21.4% compared to the end of 2021, which may affect the actual business results of commercial banks in case interest receivable from credit activities is not collected as planned.
At the same time, according to the State Bank, potential bad debts remain high, banks must make provisions for restructured debts according to the roadmap prescribed in Circular No. 03/2021/TT-NHNN, which may reduce profits at some credit institutions. (Circular on restructuring debt repayment terms, exempting and reducing interest and fees, and maintaining debt groups to support customers affected by the COVID-19 pandemic).
By the end of December 2022, the charter capital of 4 state-owned commercial banks (Agribank, Vietcombank, VietinBank, BIDV) reached 180.4 trillion VND; total assets reached 7,600.9 trillion VND; capital mobilization reached 5,955.7 trillion VND; outstanding loans reached 5,331.8 trillion VND.
The State Bank of Vietnam is coordinating with relevant ministries and branches to review and submit to competent authorities for approval a plan to increase charter capital from after-tax profits and funds for the 2021-2023 period for joint-stock commercial banks in which the State holds more than 50% of charter capital and from the state budget for Agribank.
By the end of December 2022, the charter capital of joint stock commercial banks reached VND 469.4 trillion; total assets reached VND 8,000.5 trillion; capital mobilization reached VND 5,571.1 trillion; outstanding loans reached VND 5,016.2 trillion.
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