Many banks have reported a return to strong growth in their insurance business and services. This is a positive sign for the bancassurance channel (cross-selling insurance through banks) after a period of difficulties.
Techcombank is a bank that has recorded strong growth again in the insurance sector - Photo: QUANG DINH
Statistics from the third-quarter financial reports of several banks this year, which provide detailed explanations of revenue from service activities, show that many have reported strong growth again in the insurance sector.
Net interest income narrowed.
According to data analysis group Fiingroup, the after-tax profits of all 27 listed banks exceeded VND 56,000 billion in the third quarter of this year, an increase of nearly 18% compared to the same period last year.
However, it should be noted that this growth rate was lower than the 21.6% increase in the previous quarter. The quality of profit growth is deteriorating amidst a widespread contraction in NIM (net interest margin).
Fiingroup experts believe this is a weaker-than-expected business result for the banking sector, amidst slowing credit growth and weaker non-credit business segments, causing interest and non-interest income to decrease by 2.1% and 14.2% respectively compared to the previous quarter.
According to statistics, the industry-wide Net Interest Margin (NIM) decreased to 3.3% in Q3 2024, equivalent to the lowest level in the post-Covid-19 period. The main reason, according to analysts, is the resurgence in funding costs due to higher deposit interest rates.
Data: Fiingroup
Observations from the beginning of the year show that many banks have increased deposit interest rates again, while lending rates have remained relatively stable in order to attract borrowers. Particularly since the beginning of November, many smaller banks have aggressively increased interest rates, with 12-month terms ranging from approximately 5.7% to 5.9% per year.
Additionally, the data unit also indicated that asset returns continued to decline as lending interest rates remained stable amidst the government's policy of stabilizing interest rates to support growth.
Fiingroup experts predict that banks are facing the risk of further declines in Net Interest Margin (NIM) in the near future because credit costs may increase due to rising bad debt pressure when Circular 02 on debt restructuring expires (expected on December 31, 2024).
Many banks are significantly expanding their insurance offerings.
Within the service revenue structure, many banks have recorded improvements in their insurance business.
At one bank that released its Q3 2024 financial report, which included a disclosure of revenue from service activities, many recorded double-digit growth in the insurance sector.
Specifically, the Q3 2024 financial report shows that revenue from insurance service fees brought Techcombank 594 billion VND in the first nine months of this year, an increase of nearly 30% compared to the same period last year.
Last year, Techcombank's insurance partnership revenue reached VND 667 billion, a decrease of nearly 62% compared to 2022 after the market experienced a crisis of confidence in the insurance industry.
Recently, Techcombank and Manulife Vietnam announced their decision to terminate their exclusive partnership effective October 14, 2024. Following this, the bank invested in the establishment of Techcom, a non-life insurance company.
Another bank that recorded high growth in the insurance sector is KienlongBank. According to its Q3 financial report this year, insurance revenue brought KienlongBank nearly 40 billion VND, an increase of almost 73% compared to the same period last year.
Last year, KienlongBank's insurance revenue reached VND 36.3 billion, a 44% drop compared to 2022 amidst the general economic difficulties.
Similarly, VPBank has also seen a significant recovery in its insurance cross-selling segment. In the first nine months of this year, revenue from insurance brought VPBank 2,820 billion VND, an increase of nearly 52%.
In 2023, VPBank also felt the general difficulties, with insurance revenue bringing in only 2,937 billion VND, a decrease of nearly 13% compared to 2022.
Meanwhile, insurance is considered a "cash cow" for many banks. For example, in 2022, VPBank's revenue from insurance business and services reached VND 3,353 billion, while its expenses for insurance services were only VND 57 billion.
Meanwhile, at SeABank, according to its Q3 financial report this year, revenue from insurance agency services brought in over 87 billion VND, an increase of more than 14% compared to the same period last year.
The differentiation is quite strong.
In contrast to the growth of many of the aforementioned banks, MBBank's Q3 2024 financial report shows that revenue from insurance services for the first nine months of this year remained flat compared to the same period last year, at VND 5,989 billion.
Despite not experiencing growth, this bank has a significant source of revenue from insurance, contributing 57% of its total service income.
TPBank also remained stable compared to the same period last year, with revenue from insurance and consulting services reaching nearly 290 billion VND in the first nine months of this year.
Meanwhile, LPBank, VIB, and others continued to record a decline in insurance revenue. For example, LPBank's revenue from insurance agents reached only 383 billion VND, a 28% decrease compared to the same period last year. VIB's revenue even halved compared to the same period last year, reaching only 345 billion VND…
Source: https://tuoitre.vn/nhieu-ngan-hang-thu-dam-tro-lai-tu-ban-cheo-bao-hiem-20241123131053508.htm
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