BANKS REMAIN PRUDENT ABOUT 2024 TARGETS

Major state lender Vietcombank has just released its 2023 figures, with results across a variety of areas exceeding expectation. The Hanoi-headquartered bank saw $59.5 billion in deposit volume, up over 12 per cent on-year, and outstanding balances amounting to $53.58 billion, showing a 10.6 per cent jump on-year.

Vietcombank's non-performing loan (NPL) ratio was kept at 0.97 per cent, and pre-tax profit was on target at around $1.8 billion. The bank paid $472.5 million into the state coffers last year.

Another lender reporting figures in the billion-dollar range for 2023 is the Bank for Investment and Development of Vietnam, (BIDV) which saw a healthy profit of $1.12 billion last year, up 18.6 per cent on-year. The bank’s total asset value came to $95.3 billion last year, as it remains Vietnam’s largest bank in the asset scale. Last year, BIDV posted $79.7 billion in total deposit volume, up 16.5 per cent on-year, and outstanding balances reached $73.8 billion, surging 16.6 per cent on-year.

For its part, Agribank reported $84.38 billion in total asset value and capital sources exceeded $79.3 billion for last year.

Its total deposit volume approximated $65 billion, with over 65 per cent earmarked for agricultural and rural development targets. The bank kept bad debt ratio at below 2 per cent, meanwhile its pre-tax profit exceeded $1.06 billion, setting a record.

Another major lender, VietinBank, reported an outstanding balance of $63.29 billion, up 15 per cent on-year. Credit quality also improved markedly as the bank kept its bad-debt ratio at 1.15 per cent, putting it in the group of banks with low non-performing loans ratios.

VietinBank's deposit volume surged 13.7 per cent on-year for 2023, in which demand deposit accounted for 27 per cent. At the bank's recent 2023 summary meeting on January 6, the bank's executives said they had reached their full-year profit target of nearly $950 million.

Meanwhile, southern lender Sacombank announced it achieved $28 billion in the asset scale, with income-generating assets accounting for over 90 per cent of the total. Its estimated consolidated pre-tax profit soared 50 per cent on-year to over $400 million, reaching the year’s projection.

Despite these encouraging results, banks are still cautious about setting 2024 targets in the face of the current uncertainties.

BIDV is aiming for a 14 per cent hike in the outstanding balance, as opposed to the 16.6 per cent hike seen last year, commensurate with the credit limit being assigned by the government. The bank's bad debt ratio is set to be equal or lower than 1.4 per cent, while the profit target has yet to be set.

Vietcombank expects to see nearly $2 billion in profit for 2024, up 10 per cent on-year; with total asset value and deposit volume surging 8 per cent and 12 per cent respectively by the year-end. Its bad debt ratio is set to be contained at below 1.5 per cent. Early this year, the bank was assigned a credit growth target at 16 per cent, higher than the sector average growth at 15 per cent.

Meanwhile, Sacombank envisages raising financial capacity and manpower quality, along with pushing up digital bank operations and heightening risk management, from there consolidating internal resources to reach new targets.

In its 2024 prospect report, Mirae Asset Vietnam JSC points out a raft of factors for the banking sector’s rosier performance in 2024, including anticipated global and domestic economic rebound and surging credit, lower system risk, augmenting demand deposit flow, net income margin bottoming out, and a more positive profit picture.

Some analysts have assessed that the strong credit growth in the last quarter of 2023 might not yet translate into last year's figures, but should contribute to the profit picture in 2024.

Source: VIR