Deposits pile up, securities industry profits increase sharply by 104% in Q3

According to statistics from FiinTrade, as of October 31, 2023, 951/1,609 banks and listed enterprises representing 92.5% of the total capitalization value on HOSE, HNX and UPCoM have announced their business results. Total profit after tax in the third quarter of 2023 increased by 7% over the same period, marking the first growth after 3 quarters of decline.

By industry group, the growth in after-tax profit of the whole market was mainly contributed by the financial sector. Specifically, securities increased by 104.2%, insurance increased by 19.4% and banking decreased slightly by 1.4%.

Regarding the securities companies, experts said that the common point is that all business segments have improved thanks to the market's improved liquidity and scores. In particular, the segment with the strongest recovery is self-trading, with brokerage revenue and margin lending both accounting for a large proportion of the revenue structure.

This is also the first time in more than a year that the market has recorded 6 securities companies with outstanding margin loans of over VND10,000 billion. VNDIRECT and HSC have returned to the list, while Mirae Asset, SSI, TCBS and VPS continue to maintain outstanding loans of over VND10,000 billion.

"Although the securities industry's valuation is no longer cheap, it may be more expensive. The industry's profit growth is also relatively strong," said Mr. Nguyen Anh Duc, Director of Institutional Securities Services, SSI Securities Company.

Growth in after-tax profit in Q3/2023 by industry group. Photo: FiinTrade

On the contrary, profit after tax continued to decrease compared to the same period as indicated by FiinTrade in the non-financial sector (down 3.6%), but the rate of decline narrowed significantly compared to previous quarters.

Information technology and tourism and entertainment maintained their growth momentum in recent quarters. Meanwhile, oil and gas and steel were the two industries that recorded extraordinary growth in the third quarter, breaking a series of declines in previous quarters.

Sectors that saw profits reverse from growth to decline included real estate, down 33%; industrial goods and services, down 9.9%; and pharmaceuticals, down 6.1%. Sectors that maintained a downward trend in profits included retail, utilities (electricity, water, gas), chemicals, personal and household goods, and telecommunications.

Mr. Dinh Duc Minh - Investment Director of VinaCapital Fund Management Joint Stock Company - forecasts that by the fourth quarter of 2023, the total profits of listed companies on the market will recover well from the low base of the previous year. If looking at the whole year of 2023, business results will almost be flat.

By 2024, Mr. Minh expects the growth in listed companies' profits to reach over 20%. From there, stock prices will increase. Currently, businesses are all cheaply valued and many businesses have relatively low valuations compared to history.

Source