BIDV's total bad debt increased by 50% after the first 9 months of 2023

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV - HoSE: BID) has just announced its business results for the third quarter and the first 9 months of 2023.

Accordingly, the main source of revenue was net interest income, which decreased by 2% from VND 14,098 billion in the same period last year to VND 13,783 billion.

Non-interest income also showed fluctuations with inconsistent increases and decreases. Accordingly, net profit from service activities increased by 22% to VND1,764 billion; net profit from foreign exchange trading increased by 110% to VND1,682 billion; and profit from trading securities increased 20 times to VND114 billion.

However, net profit from other activities decreased by 30% compared to the same period last year to VND741 billion. The bank's investment securities trading activities recorded a loss of nearly VND295 billion, while in the same period last year, it still made a profit of VND51 billion.

During the period, BIDV's credit risk provision was VND5,949.6 billion, up 9.6% over the same period last year. Therefore, BIDV's pre-tax profit in the third quarter of 2023 decreased by 11.7% to VND5,893 billion, resulting in a decrease in after-tax profit to VND4,728 billion.

Accumulated in the first 9 months of 2023, BIDV's net interest income was recorded at VND 41,266 billion, a slight decrease of 0.6% compared to the first 9 months of 2022.

Non-interest income also shifted as profit from trading securities increased from negative VND62 billion to VND293 billion; profit from foreign exchange trading increased by 56% to nearly VND3,140 billion. However, BIDV's net profit from business activities still decreased by 5% compared to the same period to VND35,172 billion.

Thanks to a 20% reduction in credit risk provisioning costs to VND15,409 billion, BIDV reported an 11.8% increase in pre-tax profit to VND19,763 billion; post-tax profit increased by 10% to VND15,477 billion.

In 2023, BIDV aims to increase pre-tax profit by 10-15% compared to 2022, equivalent to VND 25,360 billion to VND 26,520 billion, depending on market developments, the bank's capacity and the approval of State agencies. Thus, after 9 months, the bank has completed about 75% of the yearly plan.

As of September 30, 2023, BIDV's total assets were recorded at more than VND 2.13 trillion, almost unchanged from the beginning of the year. Of which, customer loans were VND 1.65 trillion, accounting for 77% of total assets, up 8.6% compared to the beginning of the year.

Regarding capital, BIDV's customer deposits increased by 7% compared to the beginning of the year to more than 1.58 million billion VND. Debts to the Government and the State Bank decreased sharply by 91% to 13,241 billion VND.

Regarding debt quality, BIDV's total bad debt after the first 9 months of the year was VND26,393 billion, up 50% compared to the beginning of the year. Of which, doubtful debt (group 4 debt) increased sharply by 239% from VND2,693 billion to VND9,138 billion, substandard debt (group 3 debt) increased by 41% to VND4,446 billion. Debt with the possibility of losing capital (group 5) also increased slightly by 9% to VND12,809 billion. Therefore, the ratio of bad debt to outstanding loans of BIDV increased from 1.16% at the beginning of the year to 1.6%.

On the stock market, BID shares are fluctuating around the price of 41,500 VND/share with trading liquidity constantly increasing .

Thu Huong

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