In 2023, the Bank for Foreign Trade of Vietnam (Vietcombank) recorded a consolidated pre-tax profit of more than VND41,200 billion, an increase of 10% over the previous year. Compared to neighboring banks in the rankings, this "giant" kept a profit gap of more than ten thousand billion VND.
However, Vietcombank's core business actually experienced a difficult year in the general context of the industry.
Vietcombank's net interest income from credit activities in 2023 will almost not grow compared to 2022. Non-interest income sources such as services and foreign exchange are also worse than the previous year.
In the fourth quarter alone, Vietcombank's credit income even dropped sharply by 14%, while net service and foreign exchange profits both fell by over 20%. Therefore, Vietcombank's pre-tax profit in the fourth quarter of 2023 decreased by 6% compared to the same period last year, down to VND11,690 billion.
Vietcombank's profit growth is thanks to the "accumulated resources" from previous years. After a period of strong credit risk provisioning, in 2023, Vietcombank halved this expense to more than VND4,500 billion. The sharp reduction in risk provisioning expenses is the key factor that helped Vietcombank grow its profit in 2023.
In 2023, the outstanding loans of the parent bank Vietcombank grew at a low rate of 11%, lower than the 13% growth of customer deposits. The consequences of "excess money in stock" combined with the impact of the high-interest rate mobilization period at the end of 2022, were the reasons why Vietcombank's credit income was worse than last year.
Vietcombank's asset quality also worsened in line with the industry's general trend. The bad debt ratio increased from 0.68% at the beginning of the year to 1% at the end of 2023. The debt ratio requiring attention (group 2 debt) also increased sharply by 40% to more than VND5,500 billion.
However, in 2023, Vietcombank will still maintain the income level for employees. The amount of salary, allowances and subsidies will increase by more than 900,000 billion in 2023, causing the average income of employees, including Vietcombank leaders, to increase from 35.7 million VND in 2022 to 37.6 million VND in 2023.
Quynh Trang
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