According to a recent report from MB Securities (MBS), the after-tax profit of listed banks is expected to increase by approximately 14.7% year-on-year in Q2. This figure is considered positive compared to the 11% growth in the first 3 months of the year.
MBS analysts predict that 8 banks will achieve over 10% profit growth. These include VPBank, Sacombank, VietinBank, HDBank, Eximbank, LPBank, OCB, and VIB. VPBank's profit is projected to surge by 39% to 5,046 billion VND. HDBank is anticipated to earn around 5,171 billion VND, a 25% increase.
Most of the banks highlighted by MBS analysts also appear on Vietcombank Securities' (VCBS) forecast list. Additionally, VCBS suggests that MB and MSB will also post strong results.
Credit growth and bad debt management are the main drivers of bank profits, according to VCBS analysts. Furthermore, the recovery of net interest margins (NIM) and reduced pressure on provision charges also contribute to the robust profit growth expected this quarter.
For example, VPBank's credit growth reached 12% by the end of Q2. Its NIM is estimated at around 5.9%, on par with the previous quarter but down year-on-year. Provision charges for VPBank are projected to exceed 9,000 billion VND, a rise of more than 38% compared to the previous quarter.
However, this growth is not uniform across all banks. Institutions with solid credit foundations, good risk management, and diversified income streams (such as MB, HDBank, and Sacombank) demonstrate faster recovery compared to the overall market.
Not only profits but also credit growth accelerated in Q2 thanks to the sustained low interest rate environment, according to MBS. As of 16/6, credit growth has increased by about 7% since the beginning of the year, higher than the 3.75% recorded in the same period last year.
"Private banks have shown better credit growth than state-owned banks," the MBS report stated. The securities firm also believes that NIM will not decline further this quarter.
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Transactions at a VPBank branch, 11/2022. Photo: Thanh Tung |
Transactions at a VPBank branch, 11/2022. Photo: Thanh Tung
In forecasts made earlier this year, many experts predicted that banks would see profit growth of around 10-15% this year.
According to Nguyen Trong Dinh Tam, Deputy Director of Asean Securities' Analysis Division, pre-tax profit of listed banks could continue to grow by 15-17% in the second half of the year. This positive outlook comes amid projected credit growth of 16% for the year.
Furthermore, the legalization of Resolution 42 on piloting bad debt resolution may help banks reduce overdue debt ratios and optimize the handling of secured loans, particularly in the retail lending segment. "The industry's bad debt ratio could decrease by 0.3% this year, to 2.5%," Tam said.
Thanks to their strong business performance, bank stocks remain attractive investment options, according to experts. Capital increases by several banks, such as Vietcombank, MB, ACB, and VIB, also add to their appeal. However, this group will not rise uniformly but will experience differentiation in stages. For example, over the past two months, shares of commercial banks like Techcombank and Sacombank have increased significantly, by over 20%, exceeding the market's overall growth. Meanwhile, some stocks like BID and VCB have declined.
In the latter half of the year, analysts predict that stocks that have undergone adjustments and accumulated over a long period, coupled with attractive valuations, will have good growth prospects. "State-owned banks like BIDV and Vietcombank may attract investor interest in the second half of the year," Tam said.
Trong Hieu
