Sunday, December 10, 2023 6:32:14 PM - Markets open
VN-INDEX 1,124.44 +2.95/+0.26%
HNX-INDEX 231.20 -0.64/-0.28%
UPCOM-INDEX 85.71 0.00/0.00%
Low credit growth, reducing profit put pressure on bank prospects in 2023
Vietnam News - 9/6/2023 4:03:53 PM
 (0 ratings. You must sign in to rate.)
 The outlook for the banking industry this year will not be as bright as previous years due to low credit growth and reducing profit, experts forecast.
In a recent report, VPBank Securities Company (VPBankS) forecast that pre-tax profits of the entire banking industry will slow in 2023 with a growth rate of about 10-12 per cent.
According to the experts, there will be a significant difference in profit prospects among groups of banks. In which, the group of small-sized banks may experience a sharp decline in profit growth in 2023. In fact, this slowdown is also reflected in the banks’ 2023 business plans. Most of them set a profit growth target of only 10-15 per cent in 2023, much lower than the growth rate of 32-35 per cent in the 2021-22 period.
Under the report, the experts forecast credit growth of the entire banking industry in 2023 will be at 12-14 per cent.
In the first half of 2023, credit growth of the industry was lower than the same period last year due to high lending interest rates. The experts expect in the second half of the year, the move from the State Bank of Vietnam will help lower lending rates and improve credit growth of the industry.
The experts said net interest margin (NIM) of all banks, except Sacombank, declined in the first half of 2023 due to high cost of fund (COF) and reducing current account savings account (CASA). However, the experts forecast NIM will improve in the third and fourth quarters of 2023 thanks to supportive policies from the Government.
The report also showed banks’ bad debt in the first half of 2023 increased due to the freezing of the real estate market and the poor financial health of corporate and individual borrowers under a high interest rate context.
Bad debts of most listed banks increased sharply in the first half of the year while the loan loss reserve (LLR) decreased from 143 per cent to 99.4 per cent.
Experts believe the profit growth prospects of listed banks depend greatly on asset quality control.
With the expectation that the macroeconomic situation will start to get brighter in the last quarter of 2023, the experts believe that the bad debt of the whole banking industry in the third quarter of 2023 will be equivalent to the second quarter and will have an improvement in the fourth quarter of this year.
With the Government’s policy support, including the issuance of Circular 02, the bad debt rising pressure will be postponed until the end of the first half of 2024 to give both banks and borrowers time to restructure and gradually handle the debts, according to the experts. — VNS    
Read original article here
Newer News
08/12 Insurance industry gains growth despite economic slowdown
08/12 VPB: VPBank completes additional listing of nearly 1.2 billion shares
08/12 Standard Chartered Bank Vietnam signs Master of Agreement for sustainable trade loan to BIDV valued at $100 million
07/12 Standard Chartered Bank Vietnam signs Master of Agreement for sustainable trade loan to BIDV valued at $100 million
06/12 Significant efforts made to enhance safety and transparency of corporate bond market
05/12 Việt Nam embraces global minimum tax for sustainable fiscal boost and FDI impact
04/12 Government to inspect credit growth management by central bank
04/12 Gold bar price rises by more than VNĐ3 million per tael in November
01/12 Central bank adjusts credit limits among banks due to uneven credit growth
30/11 Gold price hit new record high at VNĐ74.4 million per tael
Older News
06/09 Bank loans to real estate business rise in H1 2023
25/08 SBV fixes law in favour of economic growth
25/08 Private bond market grows stably after first month operation
22/08 Experts propose to cut interest rates of loans for social housing developers and buyers
19/08 Economic difficulties cause gold demand to drop sharply
15/08 SHB increases charter capital to nearly US$1.51 billion
11/08 Lending rate forecast to drop sharply in H2 2023
08/08 Bad debts skyrocket in wake of poor business performance
08/08 Corporate bond market hoped to develop sustainably
26/07 Corporate bond market to continue to face headwinds in H2
Newsletter Signup
Top Stories
VPB: VPBank completes additional listing of nearly 1.2 billion shares
Market falls, foreign investors continue withdrawing capital
Hà Nội’s CPI rises 4.72% in 11 months
Gov’t to tighten oversight of banking, securities following recent scandals
Banks increase capital through paying dividends in shares
Market Update
Last updated at 3:05:00 PM
VN-INDEX 1,124.44 +2.95/+0.26%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.