Vietnam’s four state-owned banks enjoy solid 2023 profit growth
Vietnam’s four state-owned banks, known as the "Big 4", all recorded sound profit growth of 10-19% in 2023.
BIDV took the lead with a year-on-year consolidated pre-tax profit growth of 19.2%, reaching over VND27.4 trillion ($1.12 billion).
It was followed by VietinBank, Agribank and Vietcombank with respective growth rates of 16% (VND20.95 billion or $854.93 million), 14% (VND25.4 trillion or $1.04 billion), and 10.4% (VND41.27 trillion or $1.68 billion).

BIDV leads state-owned banks in Vietnam in 2023 consolidated pre-tax profit. Photo by The Investor/Dinh Vu.
Despite being lower than 2022 levels, the 2023 profit growth rates were positive in the context of low credit growth until the last month of 2023.
Some joint stock commercial banks also expect profit growth similar to the Big 4 including ACB, MBBank, Orient Commercial Bank (OCB) and Sacombank. In particular, Sacombank estimated its 2023 profit growth up 50% from 2022, while the remaining range from 14-17%.
However, the majority of other banks are facing the risk of a sharp declines in profits, including not only small banks but even some large ones which had shone in recent years.
According to a recent estimate by leading broker Saigon Securities (SSI), they include VPBank (-43.4%), Techcombank (-13.5%), and TPBank (-15.5%).
It attributed the differentiated profit picture to the weak recovery of the real estate and corporate bond markets, leading to low credit growth in this group. Meanwhile, bad debt increased, putting pressure on credit risk provision costs and eroding banks' profits.
The bright spot was that the cash flow ran strongly into the state-owned commercial banks despite lower interest rates as compared to commercial joint stock banks. Meanwhile, this group also had the advantage of disbursing loans with preferential interest rates, helping credit to grow and improving the net interest margin (NIM) coefficient.
Meanwhile, large private commercial banks are struggling with provisioning, the shrinking loan market, low credit growth, and high capital prices, said SSI.
Speaking at a conference reviewing the banking industry’s 2023 performance earlier this month, Pham Chi Quang, director of the State Bank of Vietnam's monetary policy department, said that deposit interest rates in the market have decreased rapidly in recent times, currently reaching the lowest level for 20 years, much lower than the pre-Covid period.
However, it takes 3-6 months for commercial banks to balance capital sources for reducing lending interest rates, he said.
This year, the general situation is expected to improve compared to 2023, largely thanks to capital costs falling to a much lower level than 2023 and pre-provision profit improvement that helps banks have room to create a better backup buffer.
According to the broker, in the base scenario, Vietnam’s GDP growth could recover in the range of 6-6.5%, and the average annual interest rate would remain at its lowest level in a decade. The State Bank of Vietnam will have flexible responses in recording and setting up provisions for bad debts.
The 2024 pre-tax profit growth of the 10 leading banks in terms of asset size is expected to increase by 15.4% compared to 2023, marking a sharp rise from the 4.6% posted in 2023, said SSI.
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