Rosier prospects for bank tickers in H2

According to analysts at Hanoi-based VNDirect Securities, banking is one of few sectors investors should be keeping an eye on for the rest of 2024.

The probability of credit surpassing their growth targets and current attractive ticker valuations are proving attractive to investors.

Analysts said that opportunities would lean towards tickers in the VN30 group, in which banks account for a big part.

Real estate and bank tickers are often two pillars of the benchmark VN Index.

Currently, real estate tickers are struggling as the realty market remains in the doldrums. In contrast, bank tickers are expected to maintain their growth momentum, with net interest margins (NIM) expanding and costs remaining low. Lending rates are also unlikely to be cut further.

Echoing this mindset, analysts at Viet Dragon Securities (VDSC) said that the banking sector will likely lead the market for the rest of 2024 as the continuing economic rebound pushes credit growth to its target of 14-15 per cent this year.

At the same time, the scale of bad debt will fall slightly by the end of the year, when banks reveal better pre-provisioning profit figures than in 2023 to continue to clean up their balance sheets. The economic recovery will also help reduce the pressure of bad debt formation and speed up the handling of collateral associated with bad debts.

In the second quarter (Q2) of 2024, banking was one of the sectors that secured profit growth, with listed banks climbing 22.6 per cent on-year.

According to ACB Securities (ACBS)’s forecast, pre-tax profit among banks in 2024 will increase by about 20 per cent over the previous year.

Analysts at ACBS said the banking sector’s credit growth could expand by 15.4 per cent in 2024. Credit demand has grown for four consecutive months, especially retail loans, which have begun to recover after being flat throughout 2023.

Q2’s NIM among listed banks increased by 10 basis points compared to Q1 and was up 12 basis points compared to one year ago, reaching 3.76 per cent. Although deposit rates are unlikely to decrease further, lending rates are also at rock bottom and no longer under pressure to further slide.

Therefore, the NIM of the entire sector is forecast to hover at this level in the upcoming quarters.

Another factor that is certain to impact banking tickers is the US presidential election.

Tran Thi Khanh Hien, head of research at MB Securities, said that Wall Street investors are expecting Donald Trump to become US president once again.

Previously, under Trump's administration, industry stocks fared well, such as the finance-banking and real estate ticker groups. In Vietnam, during that period, banking tickers also enjoyed good price movements.

Overall, Hien said that from now until the end of the year, the stock market will have many upbeat factors, such as the economic recovery and a potential interest rate cut by US Federal Reserve.

Investors, however, must also be wary of inflation risks, exchange rate pressure, and the ongoing net withdrawal of foreign investors.

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