HSBC, Shinhan Bank, UOB record strong earnings in Vietnam

Foreign banks HSBC, Shinhan Bank and UOB posted strong performances in Vietnam in the first half of this year, according to their half-year reports.

HSBC

HSBC Bank (Vietnam) Ltd. reaped a post-tax profit of VND2.65 trillion ($110 million) in H1/2023, up 141.3% year-on-year, according to the bank’s audited financial statement.

The bank’s net interest income went up 157.3% year-on-year to over VND4 trillion ($166.2 million).

In combination with other incomes, including fee and commission, dealing in foreign currencies and trading of held-for-trading securities, HSBC Vietnam made a total operating income of more than VND4.91 trillion ($204 million), up 84% year-on-year.

As of end-H1/2023, HSBC’s total asset stood at VND190.29 trillion ($7.9 billion), down 4.2% year-on-year, including VND99.4 trillion ($4.1 billion) of placements with and loans to other credit institutions; VND63.1 trillion ($2.6 billion) in loans to customers; VND20.48 trillion ($850.7 million) in balances with the State Bank of Vietnam; VND5.27 trillion ($219 million) in investment securities, and others.

The bank’s total liabilities fell 6.05% year-on-year to VND171.59 trillion ($7.1 billion), while total equity rose 17% to VND18.7 trillion ($776.8 million). The figures included VND164.53 trillion ($6.8 billion) in customer deposits, down 6.3%.

As of June 30, HSBC Vietnam reported its capital adequacy ratio (CAR) at 18.23%. Its capital was reported at VND19.01 trillion ($789.5 million), including VND18.63 trillion ($773.5 million) of tier 1 capital and VND382 billion ($15.9 million) of tier 2 capital.

In H1/2023, HSBC Vietnam’s CAR was stable and higher than the regulatory limit set by the State Bank of Vietnam. The lender expected its CAR to remain at a healthy level for the next three years, while there is no plan to increase its capital base in the upcoming period.

HSBC Vietnam is wholly owned by the Hongkong and Shanghai Banking Corporation Limited. HSBC Vietnam was also the first wholly foreign-owned bank to operate both branches and transaction offices in the country.

Amanda Murphy, HSBC Asia-Pacific’s Commercial Banking head for South and Southeast Asia, told The Investor: "Southeast Asia remains the world’s growth engine, and as an important economy in the region, Vietnam offers a lot of business opportunities in key areas,"

"Business opportunities in Vietnam are in many areas including transition to net zero emissions and other green projects. Furthermore, more and more multinational companies are present in the market for supply chain diversification as part of the “China plus one” global trend," she said.

Shinhan Bank

Shinhan Bank Vietnam Ltd. posted post-tax profits of VND2.39 trillion ($99.4 million) in H1 of this year, up 48.23% year-on-year.

According to the bank’s half-year report, its return on equity (ROE) improved from 14.07% in H1/2022 to 17.47% in H1/2023. Its CAR rose from 17.13% by end-June 2022 to 20.43% by end-June 2023.

The bank’s equity increased to VND27.61 trillion ($1.15 billion) by end-June 2023, from VND25.22 trillion ($1.05 billion) by end-December 2022 and VND23.13 trillion ($961.4 million) by end-June 2022.

Its debt-to-equity ratio decreased to 4.72 by end-June 2023, from 5.92 by end-December 2022 and 6.02 by end-June 2022.

Shinhan Bank Vietnam is a subsidiary of Shinhan Bank Korea - an affiliate of South Korea's Shinhan Financial Group.

This August, the bank officially marked 30 years in Vietnam. Shinhan Bank established its first representative office in Ho Chi Minh City in August 1993, not long after Vietnam and South Korea officially established diplomatic relations.

2017 was a turning point for Shinhan Bank, when it successfully acquired the retail banking segment of ANZ Bank Vietnam. The move helped it expand its retail sector and offer more balance in terms of product structures between the retail and corporate sectors.

UOB

Singapore’s United Overseas Bank (UOB) recorded a core operating profit of SGD14 million ($10.5 million) from activities in Vietnam in H1/2023, nearly tripling year-on-year, according to the bank’s latest report.

The figure included SGD8 million ($6.01 million) in Q2 of this year, up from SGD6 million ($4.51 million) in Q1.

UOB noted that the ASEAN-4 group, consisting of Vietnam, Malaysia, Indonesia, and Vietnam, benefited from Citi consolidation. Citi integration costs at UOB reached SGD159 million ($119.45 million) in H1/2023.

The lender’s gross loans in Vietnam grew 21% year-on-year to SGD2 billion ($1.5 billion) as of end-June 2023.

UOB has been expanding its activities in Vietnam. At the Singapore Regional Business Forum held in Hanoi on July 7, UOB and the Foreign Investment Agency (FIA) under Vietnam's Ministry of Planning and Investment signed a memorandum of understanding (MoU) to further facilitate foreign direct investment inflows into Vietnam. This was an elevation of the first MoU signed by the two sides in 2015. The first MoU facilitated investments of SGD5.7 billion ($4.28 billion) in Vietnam.

The Singaporean bank on May 11 said that its completion of the merger with Citi's consumer banking arms in Malaysia, Thailand, and Vietnam had boosted its regional customer count from five million to over seven million as of end-March 2023.

UOB has added 15 branches to its network across Malaysia, Thailand, and Vietnam. The move brought its total number of branches in the three countries to over 200, at a time when UOB, Singapore’s third-largest bank, aims to take a bigger bite of Southeast Asia’s vast retail market.