Banks are upbeat about profit prospects in 2022

January 07, 2022 | 20:35
The State Bank of Vietnam's (SBV) fresh survey shows that most credit institutions are optimistic about the business situation in the forthcoming quarter.
Banks are upbeat about profit prospects in 2022
Banks are confident with an improved profit picture in 2022

In light of the SBV's recent survey, banks have noted a marked rebound in their profits in 2021’s last quarter against that in the previous quarter, hence increasing their expectations for a positive improvement in last year’s general business picture.

Along with this, up to 78.8 per cent of credit institutions estimated growth in their pretax profit for 2021.

However, 15.2 per cent of credit entities expected a declining profit in 2021, and 6 per cent estimated their profits to remain unchanged compared to one year ago.

In respect to assessing the profit picture for 2022, 95 per cent of banks hold expectations for positive growth in the new year, while 3 per cent expect no change compared to last year and only 2 per cent have concerns over a possible sliding profit.

Banks noted that the credit policy, the interest rate, and the exchange rate policy of the SBV have been instrumental to credit institutions’ improved performance.

In 2022’s first quarter, 49.5 per cent of banks expect a slight increase in their business outcomes compared to 2021’s last quarter. Meanwhile, 42.6 per cent of banks expected their business results to remain unchanged compared to the previous quarter, and only 7.9 per cent have concerns over a slight decrease.

For 2021’s last quarter, most banks viewed internal and objective factors as positive impacts on the banking system’s business performance compared to the third quarter.

Banks noted that the credit policy, the interest rate, and the exchange rate policy of the SBV have been instrumental to credit institutions’ improved performance.

Meanwhile, the obstacles were low demand and the customers’ strict finance. These factors, however, are expected to become better in 2022.

Banks held that the system’s liquidity was good in 2021’s fourth quarter, yet not as fruitful as it was in the third quarter in both VND and USD sources.

Banks' liquidity was expected to be in a good state with improvement in 2022’s first quarter compared to last year’s last quarter, buoyed by the recovery in the credit demand.

In contrast to rising bad debt concerns, the survey shows that most credit institutions expect the non-performing loan volume to be slightly less in the first quarter this year.

As demand upsurges for banks’ products and services, the banking sector’s credit balance is expected to hike 5.3 per cent in the first quarter this year and post a 14.1-per-cent rise for 2022.

As for the interest rate, albeit several banks slightly revised the deposit rate upwards in early December, the deposit-lending rate levels by the end of 2021 were lower than one year ago. Banks expect the interest rate to remain stable in the first quarter of 2022, and a slight up in late 2022.

The mobilised volume of the whole system is expected to increase on average 2.6 per cent in 2022 first quarter and surge by 12.1 per cent in 2022. Ninety-five per cent of credit institutions expected positive growth in total deposit volume in 2022, while 3 per cent forecast a stable deposit volume and only 2 per cent a declining one.

The labour and employment situation at banks was kept stable in 2021 compared to 2020, with 88.2 per cent of banks either recruiting more or keeping their count number intact compared to 86.6 per cent in 2020. Banks forecast the situation would even be more positive in 2022.

By Lien Thuy

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