[NEWS] - Nearly 90% of credit institutions expect profits in 2023 to grow positively

In 2023, the prospect is assessed that 88.7% of credit institutions expect to have positive profit growth compared to 2022 (lower than the rate of about 95.3% in the previous survey period). The Forecast and Statistics Department (according to the State Bank of Vietnam) has just announced the results of a survey on business trends of credit institutions in the second quarter of 2023.

According to the assessment of credit institutions, the demand for loans, payment services, and cards and deposits of customers in the first quarter of 2023 has improved but not as expected. Credit institutions forecast that customers’ demand for banking services will develop positively in the second quarter of 2023, in which the demand for loans is expected to "increase" more than the demand for deposits and payments.

The banking system’s liquidity in the first quarter of 2023 continued to be maintained in a "good" state and markedly improved compared to the fourth quarter of 2022. With credit institutions forecast, the liquidity situation will remain stable in the second quarter of 2023 and will continue to improve this year compared to 2022.

Contrary to the forecast of a slight increase in interest rates in the first quarter of 2023 and for the whole year of 2023 of the previous survey period, in this period, credit institutions expect the deposit interest rate and the average lending rate of the whole system decreased slightly by 0.08 - 0.1 points in the second quarter of 2023 and tended to decrease slightly by 0.19 - 0.34 percentage points in the whole year of 2023.

Based on the survey results, contrary to the expected increase in marginal interest rates in the first quarter of 2023 of 32.7% of credit institutions in the previous survey, this period, credit institutions have also maintained stability margin rate and service charge in the first quarter of 2023.

In line with the forecast in the previous survey period, the overall risk profile of many customer groups identified by credit institutions will continue to increase slightly in the first quarter of 2023 and a slight upward trend is expected in the next period in 2023, however, the growth rate is expected to slow down compared to previous years.

Precisely, 36.5% of credit institutions forecast a stable risk profile, about 21.2% forecast a "decrease" and about 42.3% forecast the overall risk level of credit institutions’ customer groups "increasing" in 2023 compared to 2022. Which, it is also necessary to pay attention to the group of joint stock companies, limited liability companies, private enterprises, and small and medium enterprises.

According to the report, capital mobilization of the whole system in credit institutions is expected to increase by an average of 3.2% in the second quarter of 2023 and increase by 9.2% in 2023, a slight decrease compared to the year—expected level of about 10% at the previous survey. The credit balance of the banking system is forecasted to increase by about 4% in the second quarter of 2023 and increase by about 13.1% in 2023, adjusted down by about 0.6 percentage points compared to the forecast of 13,7% in the previous survey.

In this survey, credit institutions said that there was a "slight increase" in the ratio of bad debts and outstanding loans in the first quarter of 2023, with the expectation that there will be more improvements in the second quarter of 2023.

According to the survey results, the business situation in the whole banking system in the first quarter of 2023 has "improved", but the improvement rate is still slow compared to the previous quarter. Credit institutions have assessed that the pre-tax profit of the banking system in the first quarter of 2023 has increased but has not met expectations.

However, there are about 66.7 - 79.6% of credit institutions with the expectation that the business situation will be improved in the second quarter and 2023; 88.7% of credit institutions are expected to benefit this year and will have a positive growth compared to 2022 (lower than 95.3% in the previous period), besides, there are also 5.7% of credit institutions are concerned that profits will tend to grow negatively this year and 5.7% of credit institutions estimate profits will not change.

Notably, in the first quarter of 2023, credit institutions will continue to evaluate internal and more objective factors that have a positive impact on improving the business situation of the banking system. “The economy’s demand for products and services of the unit" is expected to be the most important objective factor to "improve" the business situation of credit institutions in the first quarter of 2023 and the second quarter of 2023 and the whole year of 2023.

According to credit institutions, the labor and employment situation of the finance and banking industry in the first quarter of 2023, although it continued to improve compared to the previous quarter, has not yet achieved the expected level. The balance index of the first quarter of 2023 at 14% is lower than the expected balance index (18.8%) and the equilibrium index in the fourth quarter of 2022 (18.5%). Credit institutions are expected to have a better labor situation in the second quarter of 2023 and the whole of 2023.

Through the article, you can also easily see the difficulties and expectations for the growth of profits in 2023. Indochina Holding is an enterprise that can raise capital from funds with the lowest interest rates. Consulting on strategies and forms of capital mobilization, choosing the optimal capital structure for businesses or investment projects.

Hoang Yen (Collection source)