Banking industry profits remain positive

Orient Commercial Joint Stock Bank (HOSE: OCB ) has just announced its business results for the first 6 months of 2024, recording a profit of VND 2,113 billion. Although the accumulated debt groups in the first 6 months of the year increased and mainly came from individual customers, OCB still controlled the bad debt ratio at 2.3%, lower than the control level of 3% of the State Bank.

OCB leaders said that in the last months of the year, the bank will focus on promoting the development of individual customer groups in the middle and high-end segments with "tailored" products suitable for each specific need. In addition, applying new and effective policies to increase credit quality, accelerate bad debt handling and digital transformation.

“In the first 6 months of the year, with both objective and subjective factors from the market, along with proactively introducing many policies to accompany customers as well as increasing technology investment costs and personnel costs, OCB's second quarter results as well as the accumulated 6 months have not met expectations. However, with the goal of stable, transparent, sustainable growth, along with a clear strategy and specific action plan, I expect the bank to have better results in the last 6 months of the year,” said Mr. Pham Hong Hai, General Director of OCB.

Halfway through 2024, ACB Bank achieved pre-tax profit of 10.5 trillion VND, credit growth of 12.8%, continuing to be in the group of banks with the lowest bad debt ratio in the context of economic fluctuations and the banking and finance industry facing many challenges.

In the first 6 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, up 16% over the same period thanks to good growth in scale, improved service fees and tight cost control. ACB's ROE ratio continues to be maintained at a high level of 23.4%, leading the market in terms of efficiency.

Several other joint stock commercial banks also reported profits amid improved credit. LPBank achieved VND3,302.5 billion in pre-tax profit in the second quarter of 2024, nearly 3.5 times higher than the same period in 2023. In the first 6 months of 2024, the bank's accumulated profit was VND5,918.9 billion, up 142%. Techcombank recorded pre-tax profit in the first 6 months of 2024 of VND15,600 billion, up more than 30% over the same period last year, mainly due to net interest income (NII) increasing by more than 40%, reaching VND18,000 billion.

Improved credit is believed to be a factor boosting the banking industry's profits in the second quarter as well as the first half of the year. However, the industry's profit growth in the second quarter is expected to be low and there will be differentiation among banks.

In a recently published analysis report on the banking industry, Dragon Capital Securities Company (VDSC) forecasts that 2024 will continue to be a challenging year for the banking industry, but some credit institutions will see improvements in profit growth. Accordingly, VDSC expects that the average after-tax profit growth of banks on the watch list will reach 18% over the same period, with interest income growing 19%.

Bank profits are forecast to be positive thanks to better credit growth from the second quarter, when lending rates are more reasonable and the economy continues to recover, leading to increased demand for loans for production, business and consumption. Deposit interest rates have increased but remain at a relatively low level, so the industry's NIM will recover slightly and contribute to the growth of net interest income. With the recovery in total operating income growth, VDSC believes that banks will have the basis to increase provisions to improve the 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