Viet A Commercial Joint Stock Bank (VietABank) has just announced its business results for the third quarter of 2023 with total assets and profits decreasing compared to the same period last year.
Some positive points in the bank's operations include: Capital mobilization, outstanding loans, and income from credit interest all increased compared to the same period in 2022. In particular, income from investment securities (Government bonds) in the third quarter of 2023 was VND 130 billion, a sharp increase compared to the same period.
Outstanding credit balance reached VND 66,924 billion (including outstanding corporate bonds), up 6.57% compared to the end of 2022, reaching 94% of the 2023 plan. Pre-tax profit reached VND 592.4 billion.
According to the third quarter of 2023, VietABank's total assets reached VND 104,024 billion, down 1.07% compared to the end of 2022, reaching 92.3% of the plan. Mobilization from economic organizations and residents reached VND 87,748 billion, up 24.7% compared to the end of 2022, completing 107% of the 2023 plan.
Explaining why profits did not meet expectations, VietABank said that the cost of capital mobilization for long terms from the third quarter of 2022 led to an increase in cost of capital of VND 815 billion, an increase of 76.7% over the same period in 2022.
Lending interest rates continue to decrease while banks waive and reduce interest rates, proactively cut income to support businesses facing many difficulties, helping to support economic recovery and growth, causing net interest income to not grow as expected. In addition, increasing risk provision costs are also one of the factors that reduce profits.
As of September 30, 2023, VietABank's bad debt ratio was 1.69%, below the 3% target set by the State Bank. The overdue debt ratio increased slightly compared to the same period last year.
As of this date, VietABank has maintained stable and safe liquidity, higher than the State Bank's requirement with a reserve ratio of 13.38%, VND solvency ratio (30 days) of 195.59%, foreign currency solvency ratio (30 days) of 18.32%.
The Bank has completed the Capital Adequacy Ratio Calculation Process according to Circular 41/2016/TT-NHNN. In order to ensure that the CAR ratio complies with the regulations of the State Bank, VietABank also proactively manages the capital adequacy ratio based on implementing measures to control the scale of high-risk assets;
Develop capital increase solutions in accordance with the business situation and development strategy of each stage. VietABank's capital adequacy ratio (CAR) is over 9%, equivalent to the average level of the banking industry.
In addition to focusing on business development, the Bank also focuses on investing in developing advanced and modern technology systems by officially operating the new core banking system (Core Banking) according to the most advanced version of Oracle to improve the quality of products and services, meeting the requirements of system management in the new period.
VietABank is also one of the first banks to "launch" domestic credit cards used in Vietnam and some Napas-affiliated countries to meet the need to spend first and pay later.
According to the State Bank of Vietnam, as of September 29, 2023, credit in the entire economy reached about VND12,749 trillion, up 6.92%. Although credit has increased faster since August, the growth momentum in the first 9 months of 2023 is much lower than the 11.05% increase in the same period last year.
The main factor that has pushed down bank profits is the increase in risk provisioning costs. With the general fluctuations in the economy, especially the bond, real estate, and stock markets, many businesses and individuals are facing many difficulties, leading to bad debts, which in turn increases the cost of risk provisioning for banks.
Experts predict that bad debt is likely to continue to increase in the last months of the year because many banks are extending debt payments to businesses, causing many debts to not be transferred to the right group. When these debt groups are transferred to the right status, the bad debt ratio of the system will increase .
Thu Huong
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