Banks anticipate upward momentum in 2023

Though banks have yet to release their Q4/2022 financial reports officially, industry experts assumed there would be a sharp division in the profit picture among banks, with a ‘comeback’ in the state lenders grouping.

During 2020-2021, banks were constrained in their efforts to support people and businesses who were little affected by the pandemic and requirements to make loan loss provisioning.

Banks are expected to lead market trends in the first months of 2023

Closing 2022, Vietcombank’s pretax profit hit $1.6 billion, up 39 per cent on-year, this figure at BIDV was $980.8 million, soaring nearly 80 per cent and at VietinBank eyed a 21.5 per cent jump to reach $891.3 million.

Credit channelling into priority areas, interest rates set at reasonable levels, and good asset quality are the reasons the central bank (SBV) has allocated more credit limits to state lenders, helping banks to improve business performance.

According to analysts at VNDirect Securities, the bank sector growth fetches 32 per cent in 2022 before slowing down to expand just 10 per cent in 2023 due to sliding credit growth, tighter net profit margin and higher credit expense.

Notwithstanding, banks with underestimated share value, sound capital buffer, high capital adequacy ratio and healthy credit structure are deemed as having space for further growth as they would be prioritised for credit limit provision in 2023.

Nguyen Hoai Phuong, investment director at Vietnam-focused stock venture fund VESAF under VinaCapital, said that this year they are considering hiking the proportion of bank tickers in their portfolio, particularly those with competitive advantages in liquidity, diversified lending structure with sound risk management capacity.

Le Duc Khanh, director of Analysis at VPBank Securities, noted that it was too early to make assessments about the growth trend of banks, yet it was more likely that they would lead the stock market to the 1,060-1,100 score range before being overtaken by other sectors with smaller capitalisation.

Huynh Minh Tuan, founder and CEO of investment firm FIDT said, “Banks will prevail once their liquidity crisis is fixed as this group sits atop the chain of income-raising and investment activities."

Japanese investors keeping eye on fresh 2023 trends Last year was a complex one for Japanese businesses operating in Vietnam. After a turbulent 2021, we expected 2022 would accelerate Vietnam's recovery path. However, things have not been easy with the pandemic earlier in the year, the Ukraine conflict beginning, increased energy and logistics costs, and Chinese restrictions.

Uplifting outlook for 2023 property market The property market has shown several favourable signs and is anticipated to become more robust in 2023.