Banking industry net profit margin continues to decrease
According to recent updated data from the State Bank, credit growth as of mid-August 2024 reached 6.25%.
VIS Rating's report assessed that Techcombank, HDBank, VPBank, and LPbank recorded loan growth higher than the industry average of 7.7% in the first 6 months of 2024, led by lending to corporate customers in areas related to real estate, trade, and manufacturing.
Net interest margins (NIMs) of these banks have expanded by 30-60 basis points, resulting in higher return on assets (ROAA) than the industry average, averaging 2.2%. Fees have increased at some banks, including Techcombank, LPBank, and TPBank. In contrast, profitability of retail-focused banks (e.g. VIB, OceanBank) has declined due to subdued growth in home loans, lower investment income, and higher provisioning expenses.
However, state-owned banks did not have the above results. In a recent report by MBS Securities, the analysis team said that NIM for the first 6 months of 2024 of listed banks decreased by 18 basis points compared to the same period and 7 basis points in 2023, reaching 3.87%. Notably, NIM of listed banks has decreased over the past 2 years. MBS forecasts that NIM of banks will continue to decrease slightly in 2024.
Credit growth forecast this year
In the State Bank's recent announcement on deposit and lending interest rates of credit institutions, the average deposit interest rate in Vietnamese Dong (VND) of domestic commercial banks ranges from 0.2%/year for demand deposits and deposits with terms of less than 1 month to 5.5-6.2%/year for deposits with terms from over 12 months to 24 months and 6.9-7.4%/year for terms over 24 months.
Meanwhile, the average lending interest rate of domestic commercial banks for new and old outstanding loans is in the range of 6.9-9.3%/year. The average short-term lending interest rate in VND for priority sectors is about 3.6%/year, lower than the maximum short-term lending interest rate as prescribed by the State Bank (4%/year).
Deposit interest rates are gradually rising from the floor as the trend of increasing deposit interest rates of joint stock commercial banks continues in September 2024. Among the state-owned banks, Agribank is notable for adjusting deposit interest rates (for terms of 9 months or less) by 20-30 basis points.
According to Lao Dong statistics, in August alone, the market recorded 17 banks increasing savings interest rates including: Eximbank, ACB, Agribank, Sacombank, Saigonbank, VietBank, TPBank, CBBank, VIB, Dong A Bank, VPBank, Techcombank, SHB, VietBank, PVCombank, Nam A Bank, HDBank.
Vietcombank Securities Company (VCBS) forecasts that the credit growth rate for the whole year of 2024 is estimated at 12 - 13%. MBS expects credit growth to reach 14% in 2024 with a GDP growth scenario of 6.5% for the whole year. Accordingly, retail lending is expected to recover more strongly in the last 6 months of the year...
