According to the financial report of the first quarter announced, 7 out of 10 enterprises listed with the largest profit are banks. The list is Vietcombank, VietinBank, Hoa Phat, Vinhomes, Techcombank, MB, VPBank, BIDV, Vinamilk and ACB respectively.
In the context that the economy is being greatly affected by the Covid-19 pandemic, the fact that banks – which hold the “life life” of the economy are the largest profitable enterprises, is remarkable information.
The profit growth in the first quarter of the 7 banks mentioned above was very impressive; The lowest is VPBank with 37.6%, the rest are all over 65%, even 2.7 times higher than the same period in 2020.
In the first 3 months of the year, the most effective bank was Vietcombank with a profit of 8,631 billion dong, up 65% over the same period. Next is Vietinbank with VND 8,060 billion, an increase of 2.7 times compared to the first quarter of 2021 and completed 40-45% of the full year 2021 profit plan.
Following is Techcombank with pre-tax profit of 5,518 billion dong, up 76%; MB achieved a profit of 4,579, doubling the same period; VPBank reported a profit of VND 4,006 billion, up 37.6%; BIDV ranked 6th with a profit of VND3,396 billion, up 87%. Finally, ACB with a pre-tax profit of 3,104 billion dong, up 83%.
The impressive profitability of banks was mainly due to the strong increase in net interest income, with the main factor being a sharp decrease in input interest expenses, in the context that both credit and deposit remained unchanged compared to the beginning of the year.
Besides, the fact that banks actively reduced operating costs also contributed positively to business efficiency. For example, Vietcombank’s operating expenses in Q1 decreased by 3% and interest expenses also decreased by nearly 20%, pushing net interest income up sharply by 11.5% over the same period in 2020.
ACB, VPBank, Techcombank are all leading banks in cutting operating costs, with a margin of 15-22% over the same period last year, along with interest expenses also decreasing from 18-28%, while interest income only increased or decreased very little, showing that the gap between deposit and lending rates continued to widen significantly in the first 3 months of the year.
For example, from the beginning of 2021, Vietcombank has reduced its deposit interest rate from 4.3-6.8%/year to 3-5.6%/year with terms of 1 month and 12 months. Or like ACB has also decreased from 5-7%/year to 3-5.5%/year with 1-month and 12-month terms.
In the opposite direction, despite the phenomenon of excess capital, and the SBV repeatedly directed banks to reduce interest rates, accompany and support businesses, the interest rate level has decreased, but the reduction margin is not as large as the mobilized interest rate, which is the reason for the sharp increase in interest income of banks over the past time.
According to the SBV’s statistics, the lending interest rate at the end of 2020 decreased by an average of 1% per year compared to the end of 2019. However, the decrease was mainly in priority sectors and industries. The lending interest rate in the market with new loans, according to the survey conducted by Nhadautu.vn from mid-2020 to now, is about 8.5-10% per year. The old loans still apply the common loan rate of 10.5-12%/year.
According to some analysis companies, the current NIM (net profit margin) of the banking system is very high, about 4.5% – the highest level in about 15 years. It can be seen that in the first quarter, banks have benefited greatly from the reduction in deposit rates. In addition, some units that have the advantage of large demand deposits (CASA) such as Vietcombank, Techcombank, also help lower capital costs.
In addition to the profits coming from credit extension, revenues from securities services and business are increasing the proportion of banks’ business results in 2021. As Vietcombank recorded a 3-fold increase in profit from services over the same period, reaching VND 3,427 billion. Trading in business securities also brought 80 billion VND in profit, while in the same period the loss was VND 54.4 billion.
Source: ndh.vn – Translated by fintel.vn