Southern Bank reports third quarter profit loss

December 03, 2013 | 09:18

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Southern Bank’s third quarter profits fell sharply on the back of losses sustained by several areas of its operations.

Phuong Nam Bank

The bank’s financial statement for the third quarter showed pre-tax profit plunging 65 per cent to VND33.9 billion ($1.6 million).

The drop is the result of VND7.5 billion ($0.35 million) losses in forex trading and VND44.2 billion ($2.1 million) in investment securities trading. In the same quarter last year those areas brought the bank profits of VND7.9 billion ($0.37 million) and VND476 billion ($22.6 million), respectively.

The lender’s revenue from services fell by 53 per cent on-year while at the same time operational outlays rose 10 per cent and income from investments in other entities fell 9.5 per cent.

The bank’s profit stayed in the black thanks to net interest income of VND195.8 billion ($9.3 million) in the third quarter, up from the loss of VND178.5 billion ($8.5 million) last year.

Southern Bank saw credit shrink 0.2 per cent in the first three quarters, but at the same time its revenue from lending increased. This is attributed to increased lending interest rates.

Nguyen Xuan Thanh of the Fullbright Economics Teaching Programme expressed concern that the banks have not lowered their lending rates and that the gap between lending and deposit rates still stands at around 5 per cent. “Banks are using this gap to earn income to deal with their non-performing loans,” he said.

In the first three quarters of this year the bank reported pre-tax profits of VND246.3 billion ($11.7 million), falling 12 per cent on-year.

The bank’ bad debt ratio is 3.8 per cent, rising from 2.7 per cent at the beginning of the year.

By By Trinh Trang

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