Japan-invested finance firm Mcredit sees H1 profit drop 87%

Hanoi-based MB Shinsei Finance Company, popularly known as Mcredit, earned a net profit of VND43 billion ($1.73 million) in the first half of the year, down 87% year-on-year.

The fall in earnings drove its return on equity ratio (ROE) down to 1.39% in June 2024 from 21.92% a year earlier, the firm said in a filing to the Hanoi Stock Exchange, the operator of the local bond market.

Its owner’s equity reached VND3,038 billion ($122.19 million) as of June 30, sliding 3.6% year-on-year.

The firm's debt-to-equity ratio swelled from 6.69x in June 2023 to 8.19x in June 2024, equivalent to VND24,881 billion ($1 billion) in liabilities. Of the amount, undue bonds decreased from VND2,301 billion to VND1,093 billion as of June 2024.

In H1, Mcredit spent VND500 billion ($20.11 million) on the principal of bonds and VND57 billion on interests, it said in a separate filing.

In 2023, the finance company made a net profit of VND240 billion ($9.65 million), down 75% year-on-year, resulting in 2023 ROE of 8.2%, versus 40.65% in 2022.

Mcredit was established in 2016 as a unit of military-run MBBank. Nearly one year later, Japan’s SBI Shinsei took over a 49% stake in the finance company.

In July 2024, Hanoi-headquartered FiinRatings, a partner of Standard & Poor Global Ratings, rated Mcredit at “A-” with a stable outlook.

Ho Chi Minh City-based consumer loan provider Home Credit Vietnam saw its net profit up 124% year-on-year to VND474 billion ($19 million) in H1/2024, becoming the biggest profit maker in the consumer loan business in January-June.