Hot race to rank bank profits

4 min read

Business results in the first quarter began to reveal somewhat the profit ranking of banks this year. The champion position in Q1 profit temporarily belongs to VietinBank. Mr. Le Duc Tho, Chairman of the Board of Directors of VietinBank, said that the bank’s profit in the first quarter reached 7,000-8,000 billion dong, twice as high as the same period of the last 2 years. This profit does not include the prepayment fee of the life insurance contract with Manulife (about VND 1,600 billion in 2021).

Despite achieving the first quarter profit, it is possible to achieve a profit of $ 1 billion this year, but many analysts believe that the first quarterly profit of VietinBank is high thanks to the recognition of abnormal revenues from the year. 2020. The remaining quarters of 2021, the bank’s profit will be lower.

In terms of profit outlook for the year 2021, Vietcombank still has no rival. Vietcombank has reached a profit milestone of approximately $ 1 billion from 2019. In 2020, Vietcombank will not grow in profits to focus on supporting the economy. This year, Vietcombank aims to grow 12% profit, equivalent to 25,200 billion dong. However, right in the first quarter, the bank’s profit reached 7,000 billion dong, 34% higher than the same period last year and equal to 28% of the year plan.

VietinBank giữ vị trí quán quân về lợi nhuận trong quý I/2021. Ảnh: Đ.T Lợi nhuận tỷ USD: Vietcombank không còn là duy nhất

VietinBank held the leading position in profit in the first quarter of 2021. Photo: Đ.T

Mr. Nghiem Xuan Thanh, Chairman of Vietcombank, said that with this result, Vietcombank’s target of 25,200 billion dong profit is within reach.

In fact, in 2021, Vietcombank was assigned a credit target of 10.5%, the highest among banks with state capital (only 6-7.5%). The bank’s bad debt coverage ratio is up to 380%, which means that the cost of setting up risk provisions in 2021 will be very low. Therefore, analysts believe that Vietcombank’s profit will exceed 25,200 billion VND.

Compared to other banks, Vietcombank also has a lot of growth potential thanks to abundant cheap capital, competitive lending interest rates, low bad debts and record high bad debt coverage, the retail and service sectors have all grown very well. Not to mention, Vietcombank holds a stake in MB and Eximbank, if divested in these two banks, Vietcombank’s profit will record thousands more. In addition, the fee collected from the exclusive insurance distribution contract with FWD also gives Vietcombank a significant annual profit.

The race ranking will be more chaotic

Techcombank holds third position in the earnings ranking. In 2021, Techcombank sets a profit target of nearly VND 20,000 billion, an increase of 25.3% compared to 2020, closely chasing VietinBank.

Techcombank’s growth drivers still come from cheap capital (CASA is constantly improving), real estate loans, high-income customer services (bonds, funds, insurance …) and digital banking.

The fourth bank in the profit ranking is VPBank. Currently, this bank has not announced its profit target for 2021, but with a solid financial foundation and continuously improving capital costs, VPBank is also expected to grow well in profit in 2021. According to Securities Company VNDirect, VPBank’s credit increased by 3.9% in the first quarter. According to the Investment Newspaper, VPBank’s 2021 credit room limit was granted about 10.5%. Thus, it is likely that this year, VPBank will be the fourth bank in terms of profit of the whole system.

In the total bank profit breakdown in 2021, the fifth and sixth positions are expected to be Agribank and BIDV, respectively. After a period of restructuring, these two big state-owned companies are gradually returning to the profit race and are also two banks that contain many unexpected unknowns.

This year, Agribank has been granted a relatively low credit room (6.5%) due to the relatively limited capital adequacy ratio (CAR), slow capital raising process, and prolonged equitization. According to the set target, in 2021, Agribank will increase profit by 10%, or over 14,000 billion dong of profit before tax.

Vietcombank có lợi nhuận ngân hàng. Ảnh: Đ.T

Vietcombank has bank profits. Photo: Đ.T

Meanwhile, after a period of downturn, BIDV is gradually returning to the profit race. In 2021, this bank sets a target of 40% profit growth (reaching 13,000 billion VND). Mr. Phan Duc Tu, Chairman of BIDV’s Board of Directors affirmed that, starting from 2021, BIDV’s risk provisioning will decrease gradually, so profits will increase gradually. The reduction in risk provisioning will be apparent in the next 5 years and profit is expected to increase 24-38% / year.

With the above profit growth, it is only a matter of time before BIDV returns to the top 4 and top 5 in terms of profit, especially when the space to sell more capital of BIDV is still available, plus a guarantee contract. Exclusivity may be signed in the future, similar to the steps of Vietcombank and VietinBank.

Agribank is the most unpredictable unknown. With the current situation, Agribank is difficult to accelerate strongly, but once it is equitization, it solves the problem of capital increase, with many advantages in the three-nong lending segment …, Agribank’s profit will surely have many surprises.

The next two potential candidates in a club with a profit of over VND 10,000 billion are MB and ACB. In 2021, MB’s profit is likely to reach over VND 12,000 billion, followed by ACB with over VND 10,600 billion.

Naturally, the ranks of banks’ returns do not represent the attractiveness of the stock. In the first quarter, most of the banks’ stocks in the leading group in terms of profit did not grow as strongly as those of small banks.

Specifically, during the quarter, the market prices of shares of VCB and BIDV decreased by 2% and 10% respectively. TCB shares increased 28.3%, VPB increased 37.4%, CTG increased 16.2%, MBB increased 22.4%. Meanwhile, the price of many other stocks such as NVB, SSB, and SHB increased by 50-60%.

However, analysts of securities companies said that, in 2021, bank profits are very positive and king shares will still be one of the most potential stocks on the market this year.

Source: – Translated by