Profit from the banks credit increases

 Finance Banking News

Profit from the bank's credit increases

11:32:10 | 30/07/2010

profit from the banks credit increasesFinancial reporting in 2010 the first 6 months of banks showed profits of banks at relatively high levels . Common feature of these reports is the profits from credit operations increased sharply over the same period last year and remains high proportion of the total profits of the banks.
Interest income from loans increased

Six months of this year , after-tax profits of the Export-Import Bank of Vietnam ( Eximbank ) reached nearly 823 billion , up 15 % over the same period last year . In particular, net income from loan interests of the bank's accumulated six months of the year is 1155 billion , up 26 % over the same period last year and accounted for more than 80 % of total income from business activities bank .

Meanwhile , income from operations of the bank's services reach over 114 billion, although nearly 50 % increase over the same period last year, but revenue from the service segment accounts for 8.4 % of total income from business activities of banks .

According to banking experts , the bank achieved positive profits from credit operations in the first 6 months , especially in the second quarter , thanks to the interest rate applied for the loan agreement , ie may be higher than the ceiling of 150 % base rate , while in 2009 , these loans are consumer loans have interest rates as the lending business .

In addition, net revenue from the trim plate of the bank credit increase in numbers in 2009 relative to 2009 due in income from this array of activities banks mainly to very low from business sources such as bonds and gold floor ...

Also, although credit growth in cash in the first half of the banks is low, but credit growth is very high in foreign currency , up to 27 % compared with 2009, revenue from interest on banks are generally better in 2009 .

For Vietcombank, the financial statements of the bank's profit after tax for the six months to reach 2146 billion , up 8.7 % over the same period last year . Accordingly, net income from interest of the bank's loans increased to 40.7 % from the previous year , reaching 4190 billion while income from the array of banking services increased only 15 % .

A bank is just equitization Vietinbank also made positive figures for 2662 profit before tax profit billion in six months , reaching over 66 % target profit of the bank this year .

According to financial statements 6 months of factoring , profit after tax of these banks also increased by nearly 50 % , reaching 1,029 billion with net income from credit activities have nearly 30 % growth , while revenue growth from services is 19 % .

lack of bank stocks attractive in the short term

However , after the bank announced positive figures on profits, investors remain indifferent to each type of stock is known as the " king of stock " on the stock market and stock prices of listed on the bank continues to hold its current price .

Le Van Thanh Long , an analyst of SME Securities , noted that if only considered purely on financial indicators , the results of the first 6 months of business of banks has shown efforts order of mass commercial banks in economic conditions is not really stable and low credit growth . " The growth of profits of the banking sector is at 150-200 % over the whole economy is a positive signal for the whole industry , "he said .

However, Mr. Long added that if aspects of the bank's capital increase , the level of profit growth is not enough to offset the dilution of the bank stocks today. Earnings per share ( EPS ) of the banking sector is significantly reduced and this also contributed to bank stocks less attractive compared with other sectors at present.

Assessing the value of bank stocks in the remaining months of the year , Mr Long said that the bank's share price has reflected the value of the bank , but both influenced by general stock market banking sector accounted for a significant proportion of the market.

Stock market end of this year will be hard to be strong growth for many reasons such as providing too much stock in the investment cash flow weakness , not monetary policy easing that trend will continue to discourage short-term investors , increasing pressure to sell shares in the short term ...

In addition, large capital increase pressure on banks by the end of the year will make many investors shy and many of them choose to temporarily ignore the group bank stocks in the short term . Moreover, the business results of the banks still do not have much good though mutant bank stock prices from the year probably walked around current price level is essential, no appeal for early from short-term , Mr Long said. We value the bank 's trading floor on the stock ranges from 18,000 to 40,000 dong per share .

However , assessment of long-term vision ( 3-5 years ) , Mr Long said that bank stocks are stocks will still be noticeable, because the banking sector remains a key economic background economy .

Mr Andy Ho , chief investment officer of fund management companies investing VinaCapital also look optimistic about the prospects of the banking industry in the future . VinaCapital statistics that have strong banks will have higher growth than 3-4 times the growth rate of GDP during the period of economic development .

Source: TBKTSG

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