Business

Majority of credit institutions forecast profit growth in 2024

A total of 86.2% of credit institutions expect their profit this year to grow compared to 2023, according to the latest survey of the State Bank of Vietnam (SBV).
Majority of credit institutions forecast profit growth in 2024 ảnh 1The headquarters of the State Bank of Vietnam (SBV).(Photo: VNA)
Hanoi (VNS/VNA) - A total of 86.2% of creditinstitutions expect their profit this year to grow compared to 2023,according to the latest survey of the State Bank of Vietnam (SBV).

Under the survey released recently, credit institutions said theoverall business performance and pre-tax profit of the banking system in thefirst quarter of 2024 were not as good as expected. However, they expect itwill be better in the second quarter of 2024 and the whole year.

According to the credit institutions, interest rate, credit andforeign exchange rate policies are the most important factors that willpositively affect their business performance for the whole of this year.

Under the survey, credit institutions also predict customers'demand for banking services will improve in 2024 due to the expectation thatthe economy and the manufacturing industry will have positive developments,exports will gradually recover, and loan demand will be higher than depositdemand.

According to credit institutions, the good liquidity of thebanking system in the first quarter of 2024 will continue in the second quarterand the whole year.

Capital mobilisation of the entire banking system is expected toincrease by 3.5% on average in the second quarter, and 9.9% in the year, lowerthan the expected level of 12% recorded in the previous survey.

Meanwhile, outstanding loans of the system are predicted to riseby 3.8% on average in the second quarter and 13.6% in the year, down 0.6percentage points compared to the forecast of 14.2% in the previous survey.

According to finance expert Nguyen Tri Hieu, as credit growthplays a key role in banks earning profits, the outlook for the banking industryin 2024 is expected to be more positive than last year thanks to higher creditgrowth.

“I think credit growth this year will improve as the world’s economyrecovers and exports increase. This will create more jobs and boost consumerspending, which will help business prospects of firms become more positive, andthey will have higher capital demand,” Hieu said.

Hieu said the Government’s fiscal policies and the SBV’s creditpolicies related to lowering interest rates would also drive credit growth thisyear./.
VNA
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