The banking sector's profits remain positive.

Bank credit growth has gradually improved in recent months. Photo: Gia Mieu

Orient Commercial Bank (HOSE:OCB ) has just announced its business results for the first six months of 2024, recording a profit of VND 2,113 billion. Although cumulative loan portfolios increased in the first six months, mainly from individual customers, OCB still controlled its non-performing loan ratio at 2.3%, lower than the State Bank of Vietnam's target of 3%.

According to OCB's leadership, in the remaining months of the year, the bank will focus on developing its mid- and high-end individual customer base with "tailor-made" products tailored to specific needs. In addition, it will implement new, effective policies to improve credit quality, accelerate bad debt resolution, and promote digital transformation.

“In the first six months of the year, due to both objective and subjective factors from the market, along with proactively implementing policies to support customers and increasing investment in technology and personnel costs, OCB's results for the second quarter and the first six months did not meet expectations. However, with the goal of stable, transparent, and sustainable growth, along with a clear strategy and specific action plan, I expect the bank to achieve better results in the last six months of the year,” said Mr. Pham Hong Hai, General Director of OCB.

Halfway through 2024,ACB Bank achieved a pre-tax profit of 10.5 trillion VND, with credit growth of 12.8%, continuing to be among the banks with the lowest non-performing loan ratios amidst a volatile economy and numerous challenges facing the banking and finance industry.

For the first six months of 2024, the bank's consolidated pre-tax profit reached 10.5 trillion VND. In the second quarter of 2024 alone, pre-tax profit reached 5.6 trillion VND, a 16% increase compared to the same period last year, thanks to strong growth in scale, improved service fees, and tight cost control. ACB's ROE continued to maintain a high level of 23.4%, leading the market in efficiency.

Several other joint-stock commercial banks also reported profits amid improving credit conditions. LPBank achieved a pre-tax profit of VND 3,302.5 billion in Q2 2024, nearly 3.5 times higher than the same period in 2023. For the first six months of 2024, the bank's profit reached VND 5,918.9 billion, a growth of 142%. Techcombank recorded a pre-tax profit of VND 15,600 billion in the first six months of 2024, an increase of over 30% compared to the same period last year, mainly due to a more than 40% increase in net interest income (NII), reaching VND 18,000 billion.

Improved credit conditions are expected to be a driving factor for banking sector profits in the second quarter as well as the first half of the year. However, projected profit growth for the entire industry in the second quarter is not expected to be high and will vary among banks.

In a recently published banking industry analysis report, Rong Viet Securities (VDSC) forecasts that 2024 will continue to be a challenging year for the banking sector, although some credit institutions will see improved profit growth. Accordingly, VDSC expects the average after-tax profit growth of the banks on its watchlist to reach 18% year-on-year, with interest income growing by 19%.

Bank profits are projected to be positive thanks to stronger credit growth from the second quarter, as lending interest rates become more reasonable and the economy continues its recovery, leading to increased demand for loans for production, business, and consumption. While deposit interest rates have increased, they remain relatively low, so the overall Net Interest Margin (NIM) will recover slightly, contributing to net interest income growth. With the recovery in total operating income, VDSC believes that banks will have a basis to increase provisions to improve their ability to handle bad debts and control asset quality.

Source: https://laodong.vn/kinh-doanh/loi-nhuan-nganh-ngan-hang-van-kha-quan-1375344.ldo