Local banks earn high profits in Q1 hinh anh 1A customer at a Vietcombank branch in Hanoi. (Photo: antt.vn)

Hanoi (VNS/VNA) - In the first quarter of this year, all local banks reported high profit growth amid the impact of the COVID-19 pandemic. However, the profit growth does not reflect the complete economic picture, according to banking insiders.

It is reported that about 10 banks announced record profit growth of more than 50 percent, marking a double or triple increase compared to the same period last year.

In the first three months, Vietinbank saw profit growth surge by at least 135 per to 7 trillion VND (304 million USD). Military bank (MB) achieved a profit growth of 110 percent to 4.6 trillion VND. It is the highest increase in the last five years.

Meanwhile, MS bank earned a profit growth of 315 percent to 1.2 trillion VND. It is followed by SEAbank (126 percent to 1.931 trillion VND), and ACB (61 percent to 3.1 trillion VND).

The high increase in profit growth early this year was attributed to optimistic results in credit growth and non-interest income compared to the same period last year. Banks also maintained their good profit margins, said experts.

According to the Department of Credit for Economic Sectors of the State Bank of Vietnam, as of late last month, the outstanding loans of the economy reached over 9.46 trillion VND, making an increase of 2.93 percent compared to the end of last year. It was much higher than the 1.3 percent increase in the same period last year.

In the State-owned banking sector, the growth rate of Vietcombank's outstanding loans reached 3.69 percent – the highest level over the same period in previous years. BIDV bank and VietinBank had a credit growth of 2.7 percent and 2.6 percent respectively in the first three months this year. Private banks also have seen a good credit growth in the first quarter.

Vietcombank posted a credit growth of nearly 3.7 percent in the opening quarter of 2021, a record high for many years, Chairman of the Board of Directors Nghiem Xuan Thanh said.

Nguyen Ngoc Thanh, a banking analyst at Rong Viet Securities Company, said the sharp increase in banks’ profits was due to the decrease in activities of the banks from the second quarter of 2020 until now.

Another expert explained the high profit growth in the first quarter was because the banks had not yet made any credit provisions. That was the reason why profit growth of banks were very high in the first quarter of this year.

Experts said banks would see positive profit growth in the remaining months of 2021. However, they would not easily gain such a high growth rate as they recorded in the first quarter./.