Banks confident of achieving profit targets

In the third quarter (Q3) of this year, leading state lender Vietcombank reported more than $445 million in pre-tax profit, an 18 per cent increase on-year. In the first nine months of the year, the bank's cumulative pre-tax profit surpassed $1.3 billion, up 7 per cent compared to the same period last year.

HDBank's pre-tax profit in the third quarter reached approximately $187 million, up 42.7 per cent compared to Q3 2023. The cumulative nine-month figure was about $527 million, marking a 46.6 per cent increase and fulfilling 79.8 per cent of the annual profit target.

The bank's return on equity stood at 26.7 per cent, and return on assets at 2.2 per cent, placing it among the industry's leaders.

Credit growth is serving as the main driver to the banking sector's performance. Photo: baodautu.vn

Similarly, major state lender BIDV posted $270.7 million in pre-tax profit in Q3, showing a 10 per cent jump on-year. For the nine-month period, BIDV’s cumulative pre-tax profit came to $918.6 million, up 12 per cent on-year.

Meanwhile, state lender VietinBank recorded $273 million in pre-tax profit for Q3, up 35 per cent on-year, raising its nine-month consolidated pre-tax profit to $813 million, up 12 per cent compared to the same period last year.

Among private banks, Techcombank counted $950 million in its nine-month pre-tax profit, a 33.5 per cent jump on-year.

Southern lender HDBank raked in $(HDB) posted $527.3 million in pre-tax profit during the period, up 46.6 per cent on-year and completing around 80 per cent of its annual profit target. Meanwhile, tech-savvy VPBank achieved a consolidated nine-month pre-tax profit amounting to $577.5 million, soaring 67 per cent on-year.

Military bank MB posted $304.5 million in its Q3 pre-tax profit, a slight increase compared to the same period last year, bringing its nine-month cumulative profit to $864 million, up 4 per cent, completing about 74 per cent of its full-year target.

Most of Q3 profits across banks were driven by credit-related activities, signalling stability in this segment. However, with differing credit growth objectives, profit divergence among banks remains pronounced.

According to FiinGroup - a leading integrated financial data and information services provider, the net interest margin (NIM) of the banking sector is expected to remain stable by the end of 2024, with any potential decline likely minimal.

The sector's pre-tax profit growth is projected at 15-17 per cent for 2024 and around 20-24 per cent for 2025.

Hoang Viet Phuong, director of SSI Research, also forecast a 17 per cent profit growth for the banking sector in 2024, despite ongoing challenges. She identifies three key growth drivers for the sector, namely improved credit growth, NIM recovery, and the low-profit base from the previous year.

Following a period of sluggish credit growth in early 2024, with some declines at certain points, the State Bank of Vietnam (SBV) has expedited various measures to boost credit activities. These include allocating credit limits at the beginning of the year and allowing banks that had used up 80 per cent of their limits by August to expand their credit room.

From October, the SBV further encouraged credit growth through the disbursement of preferential loan packages. These initiatives, coupled with the strong economic recovery and seasonal factors, have led to a rebound in credit growth since late Q3.

As of October 31, total system-wide credit had increased by 10.08 per cent compared to the end of 2023.

Experts from Vietcombank Securities (VCBS) predict that credit demand will accelerate in the final quarter of the year, driven by a recovering real estate market, increased retail lending - particularly for home purchases - and improved production, exports, public investment, FDI, and consumption.

Additionally, low deposit interest rates have made lending rates more competitive, providing a significant boost to bank profits.

In practice, banks remain confident in achieving their profit targets for the year. To date, no bank has revised its profit goals set at the beginning of 2024.

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