Vietnam major broker VNDirect’s Q3 earnings fall on dwindling market share

Hanoi-based VNDirect Securities, among the 10 biggest brokers in Vietnam, earned a net profit of VND505.15 billion ($20 million) in Q3/2024, down 20.6% year-on-year, as its lost brokerage market share to rivals.

The firm’s Q3 financial statement showed its revenues from core businesses such as proprietary trading, lending activity, and stock brokerage declined year-on-year.

Income from financial assets at fair value through profit or loss (FVTPL) reached VND678.1 billion ($26.88 million) in Q3, down 26.7% year-on-year, mainly driven by lower interest rates of certificates of deposit and corporate bonds.

As of September 30, its FVTPL portfolio was valued at VND24,404 billion ($967.26 million) per the purchase prices, accounting for 56.36% of its total assets.

The biggest holdings were bonds (VND13,135 billion) and certificates of deposit (VND7,949 billion). Its share holdings included VPBank (VPB), steelmakers HSG and HPG, tech firm FPT, and agribusiness LTG.

Similarly, income from held-to-maturity investments dropped 35% year-on-year to VND96.6 billion ($3.83 million).

Income from loan and receivables was down 12.5% to VND312.9 billion ($12.4 million). Its outstanding loans reached VND10,859 billion as of September 30, up 5.6% from end-2023.

Revenue from brokerage services sank 44.4% year-on-year to VND167.52 billion ($6.64 million). Deducting operating expenses, earnings from this business halved to VND58 billion.

VNDirect saw its market share on the Ho Chi Minh Stock Exchange (HoSE) in Q3/2024 shrink from 6.46% in Q2 to 5.7%, the lowest level since Q4/2019. As such, it dropped to the sixth position on the HoSE in July-September from the fourth in Q2, according to the HoSE's Q3 ranking.

Between January and September, VNDirect booked operating revenues of VND4,113 billion ($163 million), down 11% year-on-year.

Thanks to a cut of 13% in operating expenses, the broker earned a pre-tax profit of VND1,813 billion ($71.45 million) in the nine-month period, up 21.7% year-on-year and fulfilling 72% of the year’s target.

The broker made a net profit of VND1,467 billion ($58.15 million) in the first three quarters of this year, up 22.45% year-on-year.

Shares of VNDirect, listed on the HoSE as VND, edged up 0.34% to VND14,750 ($0.58) apiece at the break on Tuesday.