Illustrative image (Source: VP Bank) Hanoi, (VNS/VNA) - Many banks have seen their serviceearnings accelerate, buoyed by increasing investment for the business segmentand rising market demands.
Financial statements recently released reveal the total net profit from serviceactivities of 14 listed banks with total assets of more than 100 trillion VND (4.27billion USD) last year rose by 21 percent compared to the previous year to 24.6trillion VND (1.05 billion USD).
In the group of large-sized banks, three State-owned banks –Vietcombank,VietinBank and BIDV – led the way in terms of earning profits from servicesoutside credit activities last year.
BIDV was the top earner with 3.550 trillion VND of net profit, up 20 percentcompared to 2017. The surge helped BIDV take over the top spot from thecountry’s largest private bank, Techcombank, which experienced a decline in netservice profit in 2018 with only 3.536 trillion VND.
Vietcombank and VietinBank also gained with 3.401 trillion VND and 2.770trillion VND, up 34 percent and 49 percent, respectively.
However, in terms of growth, the Military Bank came out in top position with awhopping surge of 127 percent to 2.563 trillion VND, which helped the bank ranksixth in the list, up three places against 2017.
In the group of smaller banks, three banks – TPBank, HDBank andLienVietPostBank – also posted earnings from services of more than 100 percentlast year. Specifically, the net profit from services of TPBank soared by 310percent to 676 billion VND while the rising rates of HDBank andLienVietPostBank were 114 percent and 128 percent to 438 billion VND and 148billion VND, respectively.
According to the banks, besides payment services, insurance services have beenalso become one of main contributors to the banks’ rising income from theservice segment.
Some banks are now recording large proportion of revenue from insuranceservices, such as VPBank, MB and SHB. The revenue from this activity accountedfor 71 percent of SHB’s service revenue, 50 percent of MB’s, and 57 percent ofVPBank’s.
For big banks, the revenue from services mainly came from payment services. Forexample, Vietcombank’s revenue from payment accounted for 66 percent of itstotal service revenue.
According to experts, banks are investing significantly in services, instead ofonly focusing on credit activities in the hope of gaining higher profits fromthe potential segment this year, especially when the central bank committed totighten credit growth.
With more than 95 million people and sharply increasing consumption, Vietnam isconsidered an attractive destination for the retail banking segment, which iswhy banks have strategically planned to boost the segment.
In fact, the in-cash habit of Vietnamese people is no longer an obstacle to thedevelopment of card network and non-credit services. Several banks are aimingto give their customers a variety of non-traditional credit services, such assavings and transactional accounts, mortgages, personal loans, debit and creditcards.
In recent years, many banks have considerably improved the quality of theirretail banking services to enhance competitiveness. They are also focusing onother aspects such as marketing, technology and human resources to attract moreindividual customers to non-credit services.
Ngiem Xuan Thanh, Vietcombank Chairman, said services would be key to making asustained and stable profit for the banking sector this year. The developmentof non-credit services contributes to diversifying bank’s services, therebybringing more customers. This type of service will also disperse risks andcreate higher profits for commercial banks.
According to Tran Du Lich, a member of the National Financial and MonetaryPolicy Advisory Council, the revenue from fees and retail banking are becomingone of the main income sources of some banks, so the move to invest in retailservices is inevitable in the future.
Based on the results gained, leaders of commercial banks said they wouldcontinue to apply this business strategy, with a focus on services in thefuture.-VNS/VNA
Financial statements recently released reveal the total net profit from serviceactivities of 14 listed banks with total assets of more than 100 trillion VND (4.27billion USD) last year rose by 21 percent compared to the previous year to 24.6trillion VND (1.05 billion USD).
In the group of large-sized banks, three State-owned banks –Vietcombank,VietinBank and BIDV – led the way in terms of earning profits from servicesoutside credit activities last year.
BIDV was the top earner with 3.550 trillion VND of net profit, up 20 percentcompared to 2017. The surge helped BIDV take over the top spot from thecountry’s largest private bank, Techcombank, which experienced a decline in netservice profit in 2018 with only 3.536 trillion VND.
Vietcombank and VietinBank also gained with 3.401 trillion VND and 2.770trillion VND, up 34 percent and 49 percent, respectively.
However, in terms of growth, the Military Bank came out in top position with awhopping surge of 127 percent to 2.563 trillion VND, which helped the bank ranksixth in the list, up three places against 2017.
In the group of smaller banks, three banks – TPBank, HDBank andLienVietPostBank – also posted earnings from services of more than 100 percentlast year. Specifically, the net profit from services of TPBank soared by 310percent to 676 billion VND while the rising rates of HDBank andLienVietPostBank were 114 percent and 128 percent to 438 billion VND and 148billion VND, respectively.
According to the banks, besides payment services, insurance services have beenalso become one of main contributors to the banks’ rising income from theservice segment.
Some banks are now recording large proportion of revenue from insuranceservices, such as VPBank, MB and SHB. The revenue from this activity accountedfor 71 percent of SHB’s service revenue, 50 percent of MB’s, and 57 percent ofVPBank’s.
For big banks, the revenue from services mainly came from payment services. Forexample, Vietcombank’s revenue from payment accounted for 66 percent of itstotal service revenue.
According to experts, banks are investing significantly in services, instead ofonly focusing on credit activities in the hope of gaining higher profits fromthe potential segment this year, especially when the central bank committed totighten credit growth.
With more than 95 million people and sharply increasing consumption, Vietnam isconsidered an attractive destination for the retail banking segment, which iswhy banks have strategically planned to boost the segment.
In fact, the in-cash habit of Vietnamese people is no longer an obstacle to thedevelopment of card network and non-credit services. Several banks are aimingto give their customers a variety of non-traditional credit services, such assavings and transactional accounts, mortgages, personal loans, debit and creditcards.
In recent years, many banks have considerably improved the quality of theirretail banking services to enhance competitiveness. They are also focusing onother aspects such as marketing, technology and human resources to attract moreindividual customers to non-credit services.
Ngiem Xuan Thanh, Vietcombank Chairman, said services would be key to making asustained and stable profit for the banking sector this year. The developmentof non-credit services contributes to diversifying bank’s services, therebybringing more customers. This type of service will also disperse risks andcreate higher profits for commercial banks.
According to Tran Du Lich, a member of the National Financial and MonetaryPolicy Advisory Council, the revenue from fees and retail banking are becomingone of the main income sources of some banks, so the move to invest in retailservices is inevitable in the future.
Based on the results gained, leaders of commercial banks said they wouldcontinue to apply this business strategy, with a focus on services in thefuture.-VNS/VNA
VNA
