Banks with billion dollar profits

Apart from the four state-owned banks, MB is the only private bank to achieve a profit of billion USD in 2023.

The banking sector’s profit growth last year was much slower than in previous years amid rising bad debts and difficulty in disbursing credit. However, many top banks last year still ensured profit growth, especially the state-owned banking group.

The list of billion-dollar profits (nearly 25,000 billion VND, converted at Vietcombank exchange rate) has 5 names, including 4 state-owned banks and one private bank, MB.

Last year, state-owned banks dominated the private sector in the profit rankings, thanks to a trend of cautious credit provisioning in previous years.

The industry's profit champion is still Vietcombank with a consolidated pre-tax profit of over VND41,200 billion, up 10%. Following is BIDV with a profit of over VND27,600 billion, up more than 20% compared to last year.

However, the core credit revenue of these two "giants" did not grow last year. At Vietcombank, profit growth was due to a halving of risk provisioning costs. At BIDV, in addition to the reduction in provisioning costs, non-credit revenue such as services, foreign exchange trading, and investment securities trading were the driving force for higher profits than last year.

Among the "Big 4" group, VietinBank is the bank that is less affected by credit. This bank achieved a profit of 25,000 billion, up nearly 20%, thanks to a slight increase in credit income and good growth in non-interest income. At the same time, VietinBank is also one of the few banks that has reduced its bad debt ratio compared to the beginning of the year.

The remaining "Big 4" is Agribank, which also achieved a profit of approximately VND25,000 billion, exceeding the set plan by 5-6%. However, the leaders said that the bank must also make great efforts to complete the profit target in order to increase its charter capital and have room to expand its loan balance.

In the private sector, MB is leading with pre-tax profit of VND26,300 billion, up nearly 16%. Last year, this bank achieved a credit growth rate of 28%, much higher than the general level. In particular, MB accelerated disbursement of loans to the real estate sector. Outstanding loans to real estate investors doubled compared to the beginning of the year, from VND21,300 billion to VND43,200 billion.

Besides, two other private banks, Techcombank and ACB, also achieved profits of over 20,000 billion VND last year.

After nearly a decade of continuous growth, Techcombank reported a 10% drop in profit in 2023, due to a decrease in credit income while having to sharply increase provisioning expenses. With a profit of nearly 22,900 billion VND, Techcombank is outside the top 5 highest profits in 2023, but still maintains a profit of nearly 1 billion USD.

Last year, ACB achieved a profit of VND20,000 billion for the first time, thanks to the growth in credit revenue and a sudden profit of more than VND2,600 billion from the purchase and sale of investment securities. Notably, in the fourth quarter, this bank also reduced operating costs by thousands of billions of VND compared to the same period in 2022.

Meanwhile, VPBank, which used to be in the top profit group, also dropped sharply last year and left the list of profits of approximately billion USD when pre-tax profit decreased by half. No longer recording extraordinary income from signing insurance contracts, credit income decreased, bad debt increased sharply due to difficulties in consumer lending, causing VPBank to experience a year of strong fluctuations.

Quynh Trang

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