15:03 | 07/09/2017 Finance - Banking
(VEN) - Bank shares, both listed and soon-to-be-listed, have become more attractive to investors thanks to the high credit growth since early this year and newly adopted bad debt reduction policies.
According to the Ho Chi Minh City Securities Corporation (HSC), the seven banks with shares listed on the securities market earned VND18 trillion in pretax profit in the first half of this year, up 22.7 percent from the same period last year. Their annual pretax profit is forecast to reach of VND36.2 trillion in 2017, 18 percent higher than 2016.
The banks’ first-half financial statements showed their impressive growth and profit. The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank or VCB), for example, earned a pre-reserve profit of almost VND8.06 trillion as of late in the second quarter of 2017, up 12 percent from the same period in 2016. VCB has reached a ratio of reserve per bad debt of over 100 percent, an attractive achievement for investors.
The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) earned a pretax profit of VND4.05 trillion in the first half of 2017, up 24.7 percent from the same period last year and accounting for 54 percent of the yearly target.
The Military Commercial Joint Stock Bank (MBBank) reached a total asset value of more than VND276.24 trillion as of the end of the second quarter of this year, up eight and 14 percent from early 2017 and the same period last year, respectively. The bank’s total outstanding loan balance and mobilized capital in the first half of 2017 soared 15 and seven percent compared to the same time last year. With a bad debt rate of 1.28 percent, MBBank has become one of the best banks in this regard. As a result, MBB shares increased 70 percent in value in the first six months of 2017, topping the securities market.
In the first half of 2017, bank shares in general experienced a growth considerably higher than the securities market’s average. The National Citizen Bank’s (NVB) share doubled in value, Saigon-Hanoi Commercial Joint Stock Bank (SHB) shares soared almost 67 percent, the Saigon Thuong Tin Commercial Joint Stock Bank (STB) shares increased approximately 55 percent, and the BIDV’s BID shares improved more than 40 percent.
Although they won’t be listed until the end of August, shares of the Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) have also attracted investors, especially foreign ones. According to Viet Capital Securities, foreign investors have registered to buy VPBank shares worth US$1.2 billion through roadshows abroad. Nguyen Duc Vinh, director general of VPBank, said foreign investors have accepted to buy the bank’s shares at a price of VND39,000 per share.
Prime Minister Nguyen Xuan Phuc recently set a credit growth target of 20 percent or higher for 2017. The target will greatly benefit banks in terms of higher profit growth and attraction of investors.