An Binh Commercial Joint Stock Bank (ABBank - UPCoM: ABB) has just announced its financial report for the second quarter of 2024 with a bright spot being its after-tax profit increasing nearly 6 times over the same period to VND 311.5 billion.
The reason is that during the period, the bank reduced its credit risk provisioning costs by 34% to VND463 billion. Operating costs also decreased by 6% to VND520 billion.
At the same time, net profit from foreign exchange trading activities increased 1.8 times over the same period to VND440 billion, also contributing to boosting the bank's profits.
However, ABBank's non-interest income recorded a decrease with net profit from service activities decreasing by 45% to nearly VND856 billion. Net profit from trading securities decreased by 62% to nearly VND2 billion.
Investment securities trading activities caused ABBank to lose 15 billion VND, while in the same period it earned nearly 81 billion VND. Only net profit from other activities increased by 8% to 67 billion VND.
In the second quarter of 2024, ABBank's main revenue, net interest income, only increased slightly by 2% compared to the same period to nearly VND 794 billion. Thanks to large profits from foreign exchange trading and reduced operating costs, the bank's net operating profit still increased by 11% to VND 853 billion.
In the first 6 months of 2024, ABBank recorded a 7% decrease in net interest income to VND 1,455 billion. The bank reported pre-tax net profit of VND 582 billion and after-tax profit of VND 465 billion, down 14% compared to the first 6 months of 2023.
Although the second quarter was positive, in the first quarter, all key indicators went down with net interest income decreasing by 16.4% and profit after tax decreasing by 69%, so in the first half of 2024, ABBank's business results still grew negatively.
In 2024, ABBank set a pre-tax profit target of VND 1,000 billion. Thus, by the end of the second quarter of 2024, the bank had reached 58% of the set target.
As of June 30, 2024, ABBank's total assets were recorded at VND 152,145 billion, down 6% compared to the end of 2023.
Of which, customer loans reached VND89,613 billion, down 7.4% compared to the end of last year. Customer deposits reached VND85,516 billion, down 14.5%.
Regarding loan quality, ABBank's total bad debt at the end of June 2024 was VND 3,228 billion, an increase of 13% compared to the end of 2023. This resulted in the bad debt/loan balance ratio increasing from 2.91% at the end of 2023 to 3.55%.
Of which, substandard debt (group 3 debt) increased by 18.4% to VND867 billion. Doubtful debt (group 4 debt) decreased by 11% to VND969 billion and debt with the possibility of losing capital (group 5 debt) increased by 34% to VND1,392 billion.
In mid-July, Moody's Ratings decided to downgrade ABBank's rating.
Accordingly, ABBank's long-term bank deposit (LT) ratings in local currency (LC) and foreign currency (FC) were downgraded from B1 to B2. At the same time, Moody's downgraded the bank's baseline credit assessment (BCA) from b3 to b2.
In addition, Moody's also adjusted the counterparty risk assessment (CRRs) of LT FC and LC (long-term in foreign and local currencies) from Ba3 to B1, and the long-term counterparty risk (LT CR) from Ba3 (cr) to B1 (cr). Moody's also changed the outlook of ABBank from "negative" to "stable".
According to Moody's, the downgrade of ABBank's long-term rating and BCA reflects the weakening of the bank's credit metrics. The bank's capitalization and profitability are expected to come under pressure in the next 12 to 18 months due to provisioning costs related to bad debts sold to VAMC.
The bank's asset quality has deteriorated over the past two years amid slowing economic growth in Vietnam, affecting borrowers' ability to repay loans.
Source: https://www.nguoiduatin.vn/nho-dau-ma-abbank-lai-quy-ii-2024-gap-6-lan-cung-ky-204240801102408534.htm
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