Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - Despite a worldwide economy hit hard by the COVID-19pandemic, the banking sector has still enjoyed a good first half of the yearand are on course to meet targets.
Nine of the 10 large-cap banks on the stock market are estimated to reportpositive profit growth for the second quarter of the year, according to SSISecurities Corporation (SSI).
Those banks are Asia Commercial Bank (ACB), the Vietnam Joint Stock CommercialBank for Industry and Trade (Vietinbank), HCM City Development Joint StockCommercial Bank (HDBank), Military Commercial Joint Stock Bank (MBBank), theVietnam Technological and Commercial Joint Stock Bank (Techcombank), Tien PhongJoint Stock Commercial Bank (TPBank), the Vietnam International CommercialJoint Stock Bank (VIB), the Joint Stock Commercial Bank for Foreign Trade ofVietnam (Vietcombank) and the Vietnam Prosperity Joint Stock Commercial Bank(VPBank).
Of those banks, ACB, Vietinbank and HDBank are the ones expected to reporttwo-digit profit growth for the first half of the year.
ACB is forecast to record 4 trillion VND (172.8 million USD) worth of pre-taxprofit in the first half, up 10 percent year-on-year, Vietinbank’s six-monthprofit is estimated at 3.03 trillion VND, up 38.7 percent year-on-year, andHDBank is expected to rise 26.7 percent year-on-year to 2.8 trillion VND.
Tien Phong Joint Stock Commercial Bank (TPBank) has estimated six-month profitgained a quarter year-on-year to reach 2 trillion VND.
The bank attributed its profit growth to an 11 percent annual credit growth andother activities such as insurance, financial guarantee and trade assurance andlower management expense.
At MBBank, Techcombank and VPBank, six-month profits are forecast to grow byone-digit rates of between 4 percent and 8 percent year-on-year.
At the annual shareholders’ meeting on June 30, the Vietnam International Bank(VIB) estimated first-half profit at 2.35 trillion VND, fulfilling 52 percentof the full-year target.
According to chairman Dang Khac Vy, good performance also came after credit inthe first six-month period rose 6 percent compared to 2019 while businessexpenses were slashed and technology upgraded.
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) lastweek announced profit in January-June was 11.3 trillion VND, equal to lastyear’s figure. Credit growth in the first half was 3.4 percent.
CEO Pham Quang Dung said outstanding credit gained 5 percent year-on-year to 772trillion VND with retail credit increasing by 7.4 percent, up 1.2 percentagepoints from 2019.
But banks are still careful with the economic performance this year as theCOVID-19 pandemic continues and the numbers of both cases and deaths globallyare rising, forcing governments to keep the economies locked down.
In a survey conducted by the State Bank of Vietnam’s Monetary Forecasting andStatistics Department in June, financial institutions admitted their businessesslowed in the past two quarters.
Overall customer risk increased while their financial and business conditionsdowngraded and demand of banking-financial products and services also scaleddown, the survey said.
In addition, the need to raise risk provision to prepare for further economicturbulence would drag on banks’ earnings in 2020, the survey said.
Average lending rate of the banking-financial sector was expected to declinefurther until the end of the year.
Outstanding credit growth of the sector was expected to be 3.5 percent in thethird quarter and 10.5 percent in 2020, down from previous forecasts of 13.1 percentand 14.1 percent.
Bank stocks were among the key sectors that picked the market up from itsthree-year low in late March and a large number of investors are betting banksmay produce some miracle for the year.
However, brokerage firms have warned the sector’s bad-debt ratios may increasestrongly in the remaining months as borrowers are unable to perform as expectedbecause of the prolonged pandemic.
As a result, banks may want to save money to prepare for the rise of bad debtsand any hits from the international markets.
Phan Dung Khanh, investment director at Maybank Kim Eng Securities Co, told Dautu (Investment) paper that the stock market was increasing unstably.
Potential risks for investors included a slowly-recovered economy, highvaluation of shares, and cash-holders were seeking short-term profitabilitytargets, he said./.
Nine of the 10 large-cap banks on the stock market are estimated to reportpositive profit growth for the second quarter of the year, according to SSISecurities Corporation (SSI).
Those banks are Asia Commercial Bank (ACB), the Vietnam Joint Stock CommercialBank for Industry and Trade (Vietinbank), HCM City Development Joint StockCommercial Bank (HDBank), Military Commercial Joint Stock Bank (MBBank), theVietnam Technological and Commercial Joint Stock Bank (Techcombank), Tien PhongJoint Stock Commercial Bank (TPBank), the Vietnam International CommercialJoint Stock Bank (VIB), the Joint Stock Commercial Bank for Foreign Trade ofVietnam (Vietcombank) and the Vietnam Prosperity Joint Stock Commercial Bank(VPBank).
Of those banks, ACB, Vietinbank and HDBank are the ones expected to reporttwo-digit profit growth for the first half of the year.
ACB is forecast to record 4 trillion VND (172.8 million USD) worth of pre-taxprofit in the first half, up 10 percent year-on-year, Vietinbank’s six-monthprofit is estimated at 3.03 trillion VND, up 38.7 percent year-on-year, andHDBank is expected to rise 26.7 percent year-on-year to 2.8 trillion VND.
Tien Phong Joint Stock Commercial Bank (TPBank) has estimated six-month profitgained a quarter year-on-year to reach 2 trillion VND.
The bank attributed its profit growth to an 11 percent annual credit growth andother activities such as insurance, financial guarantee and trade assurance andlower management expense.
At MBBank, Techcombank and VPBank, six-month profits are forecast to grow byone-digit rates of between 4 percent and 8 percent year-on-year.
At the annual shareholders’ meeting on June 30, the Vietnam International Bank(VIB) estimated first-half profit at 2.35 trillion VND, fulfilling 52 percentof the full-year target.
According to chairman Dang Khac Vy, good performance also came after credit inthe first six-month period rose 6 percent compared to 2019 while businessexpenses were slashed and technology upgraded.
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) lastweek announced profit in January-June was 11.3 trillion VND, equal to lastyear’s figure. Credit growth in the first half was 3.4 percent.
CEO Pham Quang Dung said outstanding credit gained 5 percent year-on-year to 772trillion VND with retail credit increasing by 7.4 percent, up 1.2 percentagepoints from 2019.
But banks are still careful with the economic performance this year as theCOVID-19 pandemic continues and the numbers of both cases and deaths globallyare rising, forcing governments to keep the economies locked down.
In a survey conducted by the State Bank of Vietnam’s Monetary Forecasting andStatistics Department in June, financial institutions admitted their businessesslowed in the past two quarters.
Overall customer risk increased while their financial and business conditionsdowngraded and demand of banking-financial products and services also scaleddown, the survey said.
In addition, the need to raise risk provision to prepare for further economicturbulence would drag on banks’ earnings in 2020, the survey said.
Average lending rate of the banking-financial sector was expected to declinefurther until the end of the year.
Outstanding credit growth of the sector was expected to be 3.5 percent in thethird quarter and 10.5 percent in 2020, down from previous forecasts of 13.1 percentand 14.1 percent.
Bank stocks were among the key sectors that picked the market up from itsthree-year low in late March and a large number of investors are betting banksmay produce some miracle for the year.
However, brokerage firms have warned the sector’s bad-debt ratios may increasestrongly in the remaining months as borrowers are unable to perform as expectedbecause of the prolonged pandemic.
As a result, banks may want to save money to prepare for the rise of bad debtsand any hits from the international markets.
Phan Dung Khanh, investment director at Maybank Kim Eng Securities Co, told Dautu (Investment) paper that the stock market was increasing unstably.
Potential risks for investors included a slowly-recovered economy, highvaluation of shares, and cash-holders were seeking short-term profitabilitytargets, he said./.
VNA
