Sacombank reduces risk provisioning costs by 65%, group 5 debt increases sharply

Saigon Thuong Tin Commercial Joint Stock Bank ( Sacombank - HoSE: STB) has just announced its consolidated financial report for the second quarter of 2024 with net interest income reaching nearly VND 6,117 billion, up 6.3% over the same period due to interest income and similar income decreasing by VND 2,292.2 billion.

Specifically, outstanding loans increased by VND56,023 billion, but due to the decrease in lending interest rates compared to the same period last year, interest income decreased by VND2,569.5 billion. Deposits at other credit institutions increased by VND33,334 billion, so interest income increased by VND149.2 billion.

Investment in debt securities increased by VND 13,057 billion compared to the same period last year, so interest income from investment in debt securities increased by VND 91.4 billion. Other interest income increased by VND 36.7 billion.

Sacombank's non-interest income also increased and decreased inconsistently, with net profit from service activities reaching VND681 billion, up 4% over the same period; net profit from foreign exchange trading activities increased 20% to nearly VND306 billion.

On the other hand, Sacombank's net profit from trading investment securities reached VND17 billion, down 19% compared to the second quarter of 2023. Net profit from other activities decreased nearly 2 times compared to the same period in 2023 to VND34 billion.

Meanwhile, the bank's operating expenses also increased by 31.2% to nearly VND4,001 billion. Sacombank's net profit from business activities decreased by 14.5% to nearly VND3,153 billion.

During the period, Sacombank reduced its credit risk provisioning costs by 65% ​​to VND465 billion. As a result, the bank reported pre-tax profit of VND2,688 billion, up 13.3%; after-tax profit increased 13.1% over the same period last year to nearly VND2,177 billion.

In the first 6 months of 2024, Sacombank recorded a 4.1% increase in net interest income to VND 12,067 billion. The bank reported pre-tax net profit of VND 5,342 billion; after-tax profit of VND 4,288 billion, up 12.1% compared to the first 6 months of 2023.

In 2024, Sacombank's Annual General Meeting of Shareholders approved the business plan with expected pre-tax profit at VND 10,600 billion, an increase of 10% compared to 2023. Thus, by the end of the second quarter of 2024, Sacombank had completed 50% of the profit target.

As of March 31, 2024, Sacombank's total assets were recorded at VND 717,313 billion, an increase of 6.4% compared to the end of 2023.

Of which, customer loans were VND516,635 billion, up 7%. Customer deposits increased by 7.5% compared to 2023 to VND549,184 billion.

Regarding loan quality, Sacombank's total bad debt at the end of June 2024 was VND 12,548 billion, an increase of 14.2% compared to the end of 2023. As a result, Sacombank's bad debt/loan balance ratio increased from 2.28% last year to 2.43%.

Notably, debts are showing signs of shifting. While doubtful debts (group 4 debts) decreased 1.9 times to VND2,425 billion, Sacombank's debt with the possibility of losing capital (group 5 debts) increased the most, 1.7 times higher than at the beginning of the year to VND8,409 billion.

Source: https://www.nguoiduatin.vn/samcombank-giam-65-chi-phi-du-phong-rui-ro-no-nhom-5-tang-manh-20424073114423094.htm