Q1 profits of banks, the two big guys are less positive?

It is estimated that profit growth in the first quarter of 2022 will have a large difference between the Bank. The average growth in pre-tax profit (PBT) is only about 9%-11%, this is largely due to the two banks VietinBank and Vietcombank having lower profits from a high comparability in the same period in 2021.

The remaining banks can achieve an average growth in EBT of about 25%-27% over the same period. This number is higher than the previous forecast as VPBank has extended the exclusive insurance distribution cooperation agreement with AIA along with an additional prepaid fee, enabling the bank to achieve profitable growth. good profit in the first quarter of 2022.

The highest growth in EBT is expected at SHB, Sacombank, MSB, VPBank and LienVietPostBank.

The main factors that helped banks achieve stable PBT growth in the first quarter include:

Credit growth strongly from 15% -16% over the same period. Credit growth of banks fluctuated between 2%-10% compared to the beginning of the year. Some banks with higher credit growth rates than in the first quarter of 2021 include VietinBank, BIDV, MB, HDBank, and TPBank.

While HDBank, VPBank and Techcombank increased deposit rates by 10-20 percentage points, other banks had no change. Some banks still have room to optimize LDR and maintain stable NIM during the period.

As banks have actively dealt with bad debts and consolidated a strong provisioning buffer for credit risks in the fourth quarter of 2021, bad debts and restructured loans did not have too many fluctuations in the first quarter of this year. 2022.

Restructured loans started to trend down in some banks (Vietcombank, ACB), and the bad debt ratio was kept at a relatively stable level compared to the previous quarter. This may make provisioning pressure not too heavy in the first quarter of 2022.

Up to now, most banks have announced their profit plans for the whole year, except Techcombank and VPBank. For the remaining banks, pre-tax profit in 2022 is expected to increase by 24%-25% over the same period.

With the growth of PBT for the whole year of 2022 being twice the growth rate of the first quarter of 2022, the profit outlook of the banking group in the remaining 3 quarters is quite positive.

The initial credit limit granted for 2022 ranges from 7%-15% and is higher than the 2021 limit at most banks. Therefore, credit growth in 2022 of these banks will remain relatively high.

During this year’s General Meeting of Shareholders, most banks are expected to increase their charter capital by 15%-35% in 2022, which will be done through the form of dividends/bonus distribution. However, the two “big guys” Vietcombank and BIDV have not yet announced details of their plans to issue new shares.

The positive factors that make the profit of the industry group may reach a higher level than the current estimate are the economy recovering better than expected, the extraordinary income from the association with insurance will decrease. help some banks have high profits.

However, the biggest risk is the case that deposit rates increase faster than expected.

Although the movement of deposit rates so far this year is in line with investors’ expectations, inflation risks remain a concern – especially given the impact of the Russia-Ukraine conflict on prices. oil rose rapidly.

This will be a factor that has a direct impact on the stock market and the macro economy in the coming time. With the scenario of average oil price in 2022 at 95 USD/barrel, inflation is estimated to reach 4%.