Vietcombank continues to be the "champion" of banking profits

Vietcombank reported pre-tax profit in 2023 reaching VND41,243 billion, up 10% over the previous year, only reaching 96% of the set profit target.

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank - HoSE: VCB) has just announced its financial report for the fourth quarter of 2023 with poor business results.

Accordingly, at the end of the fourth quarter of 2023, Vietcombank recorded net interest income of VND12,801 billion, down 13.6% over the same period last year. Non-interest business activities also showed a decline with net interest income from service activities decreasing by 22.4% to VND1,810 billion.

Net profit from foreign exchange trading decreased by 24.9% to VND893 billion. Notably, trading securities caused the bank to lose more than VND6 billion, while in the same period last year, this segment brought in a profit of VND4 billion.

Only other business activities recorded a profit of 410.5 billion VND, up 37% compared to the same period last year. Income from capital contributions and share purchases also reached 18 billion VND, up 56%. However, the profit growth from the above two segments still could not support the bank's business results.

During the period, the bank's net operating profit decreased by 27.6% to VND10,207 billion. Thanks to the reversal of risk provisions of nearly VND1,487 billion, the bank still reported pre-tax profit of VND11,693 billion, a slight decrease of 6% compared to the same period last year.

In 2023, Vietcombank recorded net interest income of VND53,621 billion, up slightly by 0.7% compared to 2022. Similar to the fourth quarter, the bank's non-interest business activities also plummeted when net profit from service activities decreased by 16% to VND6,839 billion; profit from foreign exchange trading activities decreased by 2% to VND5,768 billion.

The only bright spot was the securities trading business which brought in a profit of 124 billion VND, while in the same period this segment caused the bank to lose 115 billion VND.

As a result, net operating profit reached VND45,808 billion. Vietcombank's risk provision expenses decreased by 52% compared to the previous year to VND4,564 billion.

Thanks to that, Vietcombank reported pre-tax profit of VND41,243 billion and after-tax profit of VND33,054 billion, both up 10% compared to the previous year. With this profit, Vietcombank maintained its leading position in terms of profit in the banking industry.

In 2023, Vietcombank plans to have a pre-tax profit of VND43,000 billion. Thus, compared to the set target, the bank has only achieved 96% of the profit target.

As of December 31, 2023, Vietcombank's total assets were recorded at VND 1.84 trillion, up slightly by 1% compared to the beginning of the year. Of which, cash in the fund was VND 14,504 billion, down 20%, deposits at the State Bank were VND 57,104 billion, down 37% and customer loans reached VND 1.27 trillion, up 11% compared to 2022.

In terms of capital sources, debts to the Government and the State Bank are only 1,679 billion VND, down 97% compared to 2022. Meanwhile, loans from other credit institutions are 19,875 billion VND, up 90%. As of this date, Vietcombank's customer deposits are nearly 1.4 million billion VND, up 12% compared to the previous year.

Regarding loan quality, by the end of 2023, the bank's total bad debt was VND 12,454 billion, up 59% compared to the beginning of the year. Of which, substandard debt (group 3 debt) increased 4.1 times to VND 1,737 billion, doubtful debt (group 4 debt) increased nearly 3.7 times to nearly VND 2,877 billion. As a result, the ratio of bad debt/outstanding loan increased from 0.68% at the beginning of the year to 0.98% .

Source