Many banks have reported large profits of up to trillions of Vietnamese dong in the first quarter of 2022 thanks to high earnings from services and bancassurance as well as good control of provision costs.

Vietnam Prosperity Commercial Joint Stock Bank (VPBank) topped the list with profit nearly tripling over the same period last year to more than VND11.1 trillion. The record high profit contributed to bringing the bank's equity to more than VND95 trillion and capital adequacy ratio (CAR) to more than 15 per cent.

VPBank’s impressive profit was thanks to high income from service fees (26.5 per cent) and notably from a bancassurance contract with AIA - which helped the bank increase its revenue from other activities nine times.

Besides VPBank, three banks - Saigonbank, LienVietPostBank and PG Bank - also announced Q1 2022 financial statements with strong profit growth in the first quarter of the year.

At Saigonbank, pre-tax profit reached more than VND98 billion, up nearly 68 per cent over the same period last year and fulfilled 52 per cent of the annual plan thanks to all its business segments gaining positive results.

Accordingly, Saigonbank’s net interest income surged by nearly 48 per cent over the same period last year while service activities also increased by 11.6 per cent. Notably, the bank's foreign exchange and other business activities grew strongly by 137 per cent and 189.6 per cent, respectively.

LienVietPostBank’s pre-tax profit increased by 62 per cent over the same period last year, reaching more than VND1.79 trillion, in which net interest income grew by 40 per cent due to the rising scale of retail lending and the interest recovery of loans restructured due to COVID-19.

LienVietPostBank’s net profit from service activities increased by 34.4 per cent to VND217.4 billion thanks to services such as insurance, card and digital banking. Other business activities also brought the bank more than VND191 billion in net profit, increasing many times over the same period.

At other banks, though they have not yet announced their financial statements, Saigon Securities Incorporation (SSI) estimated more than ten banks gaining double-digit profit growth rates in Q1 2022.

According to SSI, Saigon-Hanoi Commercial Joint Stock Bank (SHB) ranked second behind VPBank with an estimated profit growth of 92 per cent to VND3.2 trillion, thanks to the credit growth of 5 per cent and deposit growth of 2.5 per cent compared to the beginning of the year. The bank’s net interest margin (NIM) was estimated to remain stable.

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) followed with an estimated rise of 40-50 per cent, equivalent to a profit value of VND1.4-1.5 trillion in Q1 2022, mainly from increases in operating income and good control of provisioning costs.

The remaining banks with positive profit growth according to SSI’s report are Asia Commercial Joint Stock Bank (ACB), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), HCM City Development Commercial Joint Stock Bank (HDBank), Military Commercial Joint Stock Bank (MB), Maritime Commercial Joint Stock Bank (MSB), Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Tien Phong Commercial Joint Stock Bank (TPBank), Vietnam International Commercial Joint Stock Bank (VIB) and Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank).

The only bank that experienced a profit decline in SSI’s report is Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank). Accordingly, SSI believed although the credit and deposit growth rates of VietinBank by the end of Q1 2022 were estimated at high levels of 7 per cent and 5 per cent, respectively, compared to the beginning of the year, its pre-tax profit could be lower than the same period of 2021 due to the high comparison base. In addition, VietinBank’s fee revenue from the bancassurance deal with Manulife may not be recorded in Q1 2022.

With a positive profit in the first quarter of the year, many bank leaders believed they would meet business plans set by the banks in 2022.

SHB Chairman Do Quang Hien said the bank’s 2022 business plans would be feasible thanks to rising revenue from service fees and current account savings accounts (CASA) ratio. — VNS