How is the bank with record-breaking stock performing?

The VN-Index plummeted by over 15 points last weekend, dropping close to the 1,200-mark, and stocks across the board saw sharp declines. However, many banking stocks still maintained their green color, with some closing at record highs.

A typical example is BID of the Bank for Investment and Development of Vietnam. The closing price of BID on the day the market fell sharply was VND 52,000 per share, up 4.52% compared to the previous session. If calculated from October last year to now, BID shares have continually risen by about 40%. BID is also currently at its highest price level (adjusted for stock splits) since it went public.

The market capitalization of BID has also skyrocketed to over VND 296,000 billion (approximately USD 12 billion), second only to Vietcombank in the banking industry.

The surprising performance of BID comes at a time when many other banking stocks have yet to recover to their highest levels in the past 1-2 years.

So what has driven the strong increase in the price of BID shares?

The 2023 business results report of BIDV shows that by the end of December 31, 2023, all business indicators were achieved as planned. The total assets reached VND 2.3 million billion, maintaining its position as the largest commercial joint stock bank in Vietnam in terms of total assets.

Captial mobilization reached VND 1.89 million billion, growing by 16.5%. Credit outstanding reached VND 1.75 million billion, increasing by 16.66%, guaranteeing the State Bank’s limit.

The bad debt ratio was controlled at 1.1%. The bank has also made sufficient provisions for risks as required. It is worth noting that the consolidated pre-tax profit reached over VND 27,650 billion, ranking second among banks with the highest profit in 2023.

Not only BID, among the banking stocks that have recently surged, some other stocks like ACB, HDB have also continuously increased and are currently at their historical highs. For example, the ACB shares of Asia Commercial Joint Stock Bank closed the trading session on February 23 at VND 27,300, a slight decrease of 1.27% compared to the previous session. On February 23, there was a moment when the price of ACB shares reached VND 28,300, the highest level in the bank’s history (calculated based on the share price after adjusting for dividends).

ACB has also joined the strong price surge of banking stocks from October last year until now, with an increase of over 20%. The bank has had positive business results in 2023.

The 2023 business results report shows that the bank achieved all the business targets set at the shareholder’s general meeting, with a credit growth rate of 17.9%, a mobilization increase of 16.6%, and a profit exceeding VND 20,000 billion.

The growth in ACB’s profit mainly comes from a 48% increase in non-interest income compared to the same period. Foreign exchange trading and investment activities have contributed significantly to the income growth of ACB.

It is worth noting that in 2023, ACB’s credit scale increased by 17.9%, higher than the industry average of 13.7% and the highest credit growth rate in the past 10 years.

Another bank whose stock is at its historical high is HDB of HDBank (HCM City Development Joint Stock Commercial Bank). The price of HDB is currently VND 22,500 per share, a decrease of 1.75% compared to the previous session. Although HDB’s stock has cooled down in the past few days, it is still at its highest level ever, making it one of the banking stocks with prices surpassing previous peaks, even though the VN-Index is currently around 1,200 points, far below the 1,500-point record set at the beginning of 2022.

In terms of business operations, in 2023, HDBank achieved a pre-tax profit of VND 13,017 billion, an increase of 26.8% compared to the previous year. The non-performing loan rate was 1.5%, and the bank proactively set up provisions to strengthen its financial buffer. As of December 31, 2023, the bank’s total assets reached over VND 602,000 billion.