A transaction between customers and staff at a SeABank office (Photo: tinnhanhchungkhoan.vn) Bank stocks have been showing impressive performance in recentsessions, playing the role as the market’s leader while most other stock groupsplummeted.
Foreign investment funds and securities companies are optimisticabout the outlook of bank stocks in 2022.
In a recent report, foreign fund VinaCapital citing the latest surveyresults of the State Bank of Vietnam (SBV), said that in the fourth quarter of2021, the bank business situation had significantly improved compared to theprevious quarter. Banks also expect that their business situation will continueto improve further in the first quarter of 2022 and the whole of 2022.
"Credit risk is expected to decline slightly in 2022compared to 2021. Therefore, we expect bank stocks to record positive resultsin 2022," VinaCapital said in the report.
Analysts from the MB Securities Company (MBS) also see promisinggrowth of the banking industry after disruptions caused by the COVID-19pandemic thanks to favourable macro factors such as rapid economic growth, astable political situation and the participation in many free trade agreements.
In addition, asset quality continued to be improved because ofthe supportive policies of SBV and the proactive strategy in ensuring the assetquality of commercial banks. MBS also expects the bad debt ratio to improve in2022, while the bad debt coverage ratio will to continue to be stable.
As the SBV continues to loosen monetary policy to maintain lowinterest rates, banks' profit picture is more positive this year.
Capital-raising activities are also one of the highlights of theindustry in 2022, as a series of banks announced plans to sell capital tostrategic shareholders such as VPBank or Orient Commercial Joint Stock Bank(OCB).
Meanwhile, Tran Thi Khanh Hien, Analysis Director of VNDirectSecurities, said that the stock market still attracts domestic investors with arising number of new accounts. And after realising the risk of investing instocks that are advertised on online groups, investors will return to basicstocks with transparent information disclosure, and the banking industry willbe in focus.
However, Hien said that the profit growth outlook in 2022 willbe lower than in 2021 as banks have to balance risk control and expected profitto grow only 19 percent, which is lower than 2021.
According to the expert from VNDirect, raising capital,extending foreign room and changing trading exchanges are factors affectingbank stocks. In 2022, there will be no leading group and there will bedivisions and unequal opportunities among bank stocks.
"And of course, bank stock prices are expected to witnessstrong divisions according to the profit growth rate and an individual story ofeach bank," said Hien.
Bullish business results
Ahead of the Tet holiday, many banks reported positive resultsin 2021 with optimistic goals, promising new breakthroughs this year.
In its fourth quarter business results, OCB said that the bank’sprofit after tax rose 24.6 percent on-year to 4.4 trillion VND (194.6 millionUSD) in 2021.
Its return in equity (ROE) and return on assets (ROA) remainedat high levels, which was 2.59 percent and 22 percent, respectively. OCB’s baddebt ratio was also under control, down 0.45 percentage points year-on-year to0.97 percent.
The report showed that as of December 31, the bank’s total assetsreached over 184.4 trillion VND, up 21 percent over the same period of 2020.
The results were thanks to comprehensive digitisation andeffective control in operating costs.
Similarly, despite a challenging year due to COVID-19, SaigonHanoi Commercial Joint Stock Bank (SHB) still recorded profit before tax of 6.2trillion VND, up 90.3 percent over 2021, completing 107 percent of the wholeyear plan.
As of December 31, SHB's total assets reached 506.5 trillion VND,up 23 percent compared to the end of 2020. The bank’s charter capital was 26.67trillion VND, completing the capital plan, while its own equity according toBasel II standards reached 53.2 trillion VND.
In addition, after strictly controlling operating costs, SHB’scost to income ratio (CIR) edged down to 24.22 percent, making it one of thebest cost control joint stock commercial banks. Its individual bad debt ratiowas managed at 1.3 percent.
SeABank (SSB) saw an increase of 89 percent on-year in profitbefore tax to 3.3 trillion VND, exceeding 135 percent of the set plan thanks todiversification in sources of revenue and good management of operations.
As of December 31, SeAbank’s total assets increased by nearly 31.5trillion VND compared to the same period of 2020 to 211.6 trillion VND./.
VNA
