An employee of PG Bank performs a transaction at its office. — Photo courtesy of PG Bank

HÀ NỘI — Many banks posted less promising business results in the third quarter of 2023, with profit before tax continuing to be affected by the deceleration of credit growth. The net interest margin (NIM) narrowed, while non-performing loans were increasing. 

In the third quarter financial statement, Petrolimex Group Commercial Joint Stock Bank (PG Bank) posted profit before tax of VNĐ56.6 billion (US$2.3 million), a decrease of 60.1 per cent year-on-year. Revenues of all segments, including net interest income, service activities, foreign exchange and securities trades, declined during the period. 

For the first nine months of the year, its profit before tax reached VNĐ360.2 billion, down 6.7 per cent from last year. PG Bank's bad debt at the end of September 2023 was VNĐ796 billion, an increase of VNĐ51 billion from the beginning of the year.

Similarly, Bắc Á Commercial Joint Stock Bank (Bắc Á Bank) said that its profit before tax reached VNĐ77.1 billion, down 73 per cent on-year.

The fall was mainly due to a sharp decrease in its core business activities, which was down 33.06 per cent from the same period last year to over VNĐ426.2 billion. 

Other business segments of Bắc Á Bank have a relatively small contribution to its total operating income. 

As of September 30, the bank’s net interest income decreased slightly by 1.5 per cent over last year to more than VNĐ1.6 trillion. 

Its profit before tax in the first nine months still decreased by 22.9 per cent year-on-year to nearly VNĐ551.2 billion, while profit after tax also dipped 22.5 per cent to VNĐ444.14 billion. 

With a target of VNĐ880 billion in profit after tax for the whole of 2023, Bắc Á Bank has only achieved 50 per cent of the plan after nine months.

According to the third quarter business results of VPBank, its profit before tax reduced by 31 per cent from 2022 to VNĐ3.1 trillion. For the first nine months, the lender’s profit before tax was nearly VNĐ8.3 trillion, a 58.2 per cent decrease over last year. 

Bảo Việt Joint Stock Commercial Bank (BaoVietBank) has just released its financial report with profit before tax for the third quarter reaching VNĐ9.1 billion, down 5.7 per cent. In the first nine months, the bank’s profit before tax slid 6.7 per cent to VNĐ 33.8 billion.

On the contrary, Saigonbank, with the lowest asset scale in the system, was the first bank to report profit growth, but mainly thanks to a cut in risk contingency cost during the period. In particular, the bank’s profit before tax was VNĐ64.7 billion, up 7.5 per cent on-year. 

For the first nine months, its profit before tax rose 5.1 per cent to VNĐ248.1 billion, achieving nearly 83 per cent of the year's profit target.

Also recording a positive performance in the third quarter, Liên Việt Post Joint Stock Commercial Bank (LPBank) reported profit before tax of VNĐ1.24 trillion, a slight gain from the amount of VNĐ1.23 trillion set in 2022.  

Accumulated the last three quarters, the bank's profit before tax reached nearly VNĐ3.7 trillion, down 24 per cent over last year and reaching 61.45 per cent of the yearly plan.

Mixed picture 

A survey conducted by the State Bank of Việt Nam (SBV) showed that most credit institutions lowered their profit expectations in the near future. 

Specifically, 82.6 per cent of credit institutions expect profits before tax to grow positively in 2023 from 2022, while 13.8 per cent are worried that profits would grow negatively. 

Analysts of Bảo Việt Securities Company (BVSC) expect that the banking sector’s profit would grow 8 per cent in the third quarter of 2023, 5.5 per cent in the second half of the year and 5.2 per cent in the whole year. 

BVSC also believes that banking stocks are valued at a record low. The price-to-book ratios (P/B) of many banks are at the lowest level since 2016, which is a good opportunity for long-term holding.

SSI Research said that banks' profits in the third quarter are forecast to witness a big divergence. 

Among the group of state-owned banks, VietinBank reported the biggest profit growth, mainly due to a decrease in provision costs from a high level last year, the securities firm said.

VietinBank’s credit increased by 9-10 per cent from the beginning of the year at the end of September, but NIM decreased over the same period. As a result, its profit reached about VNĐ4.9 - 5 trillion during the period.

Meanwhile, Vietcombank is considered to have the largest profit in the third quarter, reaching about VNĐ9 trillion, an increase of 18 per cent over last year. 

BIDV is the only state-owned bank to record a decrease in profit in the third quarter, according to SSI Research, down 10-12 per cent year-on-year and weighed by provision costs. However, with profit before tax expected to reach about VNĐ6.1 - 6.2 trillion, BIDV still ranks second in the group of state-owned commercial banks in terms of profit.