Kinh tế

What do “money-making” businesses do to make money “make money”?

In the business results picture of the banking industry in 2021, the brightest color is profit. VND 197,420 billion is the profit earned by 27 listed banks in the past year, an increase of 31% compared to the previous year. Notably, there are 2 banks entering the billion-dollar club, when the profit reaches over 1 billion USD. and also 2/27 banks recorded negative profit growth, down compared to before.

About this year’s expectations, according to a survey by the Department of Statistical Forecasting State bank, about 84% of credit institutions believe that the business situation will improve. Particularly in the first quarter of 2022, 46.5% of credit institutions think that their business results will increase slightly, and 7.9% of credit institutions are afraid of a decline.

With the above data, it can be seen that in the middle of the pandemic, banks are still a dream profitable industry group, but they are also quite cautious when forecasting the business situation this year.

What do

In the midst of the pandemic, banking is still a dream profitable industry group. Illustration.

Banks boost revenue from retail and services

If in 2015, retail only accounted for about 30.6% of the total credit balance in 2018 it increased to 37.5% and by the end of last year it was about 41%. In a nutshell, in the past, banks focused on lending large loans, hundreds or trillions, now they are ready to redirect loans to smaller loans, only a few million, or tens of millions, and boost their income. from service.

In addition to lending, retail services such as insurance revenue and digital banking services also grew positively. Many banks set a profit target this year to increase by 20-30%.

“If before, credit was collected up to 90%, now there are credit institutions that collect services up to 50%, the rest is credit. That shows that banks are diversifying products and services, increasing revenue. services are very high in line with international trends”, said Mr. Nguyen Quoc Hung – General Secretary of the Vietnam Banks Association.

Ms. Michele Wee – General Director of Standard Chartered Vietnam commented: “The banking sector, especially the retail banking segment, will continue to play a central role in supporting the recovery of production and business activities. business, as well as the economy in general.

It is undeniable that more and more banks promote retail.

Solutions to control bad debts of banks

Any bank is concerned about the risk of bad debt. Some banks believe that the risk of increasing bad debt is there, but the banks themselves always take this risk into account right from the time of lending.

Selecting customers with potential for recovery right from the time of lending, or when debt restructuring is a solution implemented by some banks to avoid arising new bad debts.

In order to reduce bad debt pressure, banks also increased their risk provisioning and at the same time accelerated the handling of bad debts through VAMC. However, experts are recommending to extend Resolution 42 for another 3 years to have a legal basis for banks to overcome bad debts.

In the meantime, credit institutions and VAMC are also looking for ways to promote buying and selling of bad debts at market prices, through debt trading floors, helping to make information transparent so that they can attract more investors even in the future. National and international interest in debt trading market.

To control the risk of bad debt, banks will have to increase provision for risks. Provisions for bad debts can be considered as “savings” of commercial banks.

This year, the provision must be made, but if the debt is recovered later, the other provision will be refunded, becoming the future profit of the bank.

* Invite readers to watch programs broadcast by Vietnam Television on TV Online and VTVGo!

You are reading the article What do “money-making” businesses do to make money “make money”?
at Blogtuan.info – Source: vtv.vn – Read the original article here

Back to top button