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Banks post huge profits despite low credit growth
Credit growth throughout the banking sector in the first quarter remained low at 0.26 per cent, but many banks still reported significant profits.
According to forecasts, first-quarter profits are expected to remain stable, maintaining high levels despite this low credit growth. A report by the State Bank of Vietnam (SBV) stated that from the beginning of the year until March 25, credit to the economy reached about $567.2 billion, an increase of 0.26 per cent compared to the end of 2023, with March alone seeing a 0.98 per cent increase.
As one of the first banks to announce consolidated business results for the first quarter, SeABank achieved total revenue of $268.25 million, up 4.6 per cent, and pre-tax profit of $62.75 million, up nearly 41 per cent compared to the same period last year.
The bank reported that its net operating income also recorded impressive growth of nearly 51 per cent compared to the same period last year, reaching $29.38 million. In the first quarter of this year, SeABank's deposits and valuable papers increased by 4.3 per cent compared to the same period, and total outstanding customer loans reached $7.55 billion, with a net increase of $61.96 million.
At its AGM on April 2, VIB leaders stated that they have maintained a good net interest margin because the bank has managed its brand and customer care well, so the provision for credit losses was not very high.
Leaders also mentioned that the bank's credit growth reached about 1 per cent in the first quarter, and estimated profit exceeded $108.3 million, equivalent to the same period last year. The bank has set a pre-tax profit target for the whole year of nearly $501.9 million, an increase of 13 per cent compared to 2023.
ACB also shared its first quarter results recently. Accordingly, credit growth at ACB reached 3.7 per cent, double the industry average and better than the same period last year. Estimated profit reached $204.17 million, close to the annual plan, but a slight decrease of about 5 per cent compared to the same period last year due to an extraordinary income boost from debt processing in the same period last year.
Excluding these factors, ACB's first-quarter growth reached 3 per cent. ACB has set a pre-tax profit target for 2024 of $916.67 million, up 10 per cent compared to 2023.
Tran Thi Khanh Hien, director of the Research Department at MB Securities (MBS), said that investment securities credit growth in 2024 could reach the target of 14-15 per cent.
There are gradual warming signs as apartment prices in major cities like Hanoi and Ho Chi Minh City are increasing along with demand. This is expected to boost credit in the secondary real estate market, thereby helping the housing loan segment to recover. MSB has also adjusted its forecast for credit growth in 2024 for most banks listed on its watchlist, with expectations for positive changes in both the corporate and individual customer loan segments.
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