Bac A Bank (Bac A Bank – Code: BAB) has just announced its 2023 financial report with positive business results despite the difficult economic context and many influences from the world market.
As of the end of 2023, Bac A Bank’s total assets reached 152,243 billion VND, an increase of 18.2% compared to the beginning of the year and exceeding the plan set out at the 2023 Annual General Meeting of Shareholders.
Along with that, in the context of interest rates being adjusted down throughout the banking system, Bac A Bank’s total customer deposits still reached 118,477 billion VND, an increase of 22.3% compared to the end of the previous year thanks to the policy of good customer care and many exclusive incentives for each savings product.
Good deposit mobilization growth provides a stable source of capital for the bank and at the same time shows that customer confidence in Bac A Bank is increasing.
During the year, Bac A Bank’s credit growth always complied with the limits granted by the State Bank of Vietnam (SBV). As of the end of 2023, loans to customers increased by 6.1% compared to the previous year, lower than the overall growth rate of the industry due to the general demand for capital in economic sectors recovering quite slowly.
The bank has also always accompanied its customers in sharing difficulties with many interest rate incentive programs to support individuals and businesses to overcome difficulties, implement debt restructuring for customers according to Circular 02, etc.
In the fourth quarter, the bank’s business activities showed clear signs of recovery with pre-tax profit increasing by 57% compared to the same period last year, reaching over 510 billion VND. The bank’s non-interest income emerged as a bright spot when it became the main profit growth driver.
In addition, thanks to effective management, the bank’s operating expenses in the last quarter of the year decreased by 18% compared to the same period to over 526 billion VND, supporting profit growth.
Accumulated over the whole year of 2023, the bank’s total operating income reached over 3,000 billion VND, an increase of 6.2% compared to the previous year while total expenses were at 1,800 billion VND, an increase of 6.8%. Of which, the bank’s net interest income is still the main source of revenue, bringing in 2,389 billion VND.
The bank’s non-interest income grew positively, contributing significantly to profit growth. The service segment recorded a growth of more than 15% compared to the previous year, bringing in 105 billion VND in net interest income. The business segments of foreign exchange and buying and selling investment securities or income from capital contributions and buying shares all have high growth rates.
This growth rate was achieved thanks to the great efforts of the bank during the year, by promoting investment in digital technology transformation activities, non-cash payment activities, a series of credit card incentives, and improving electronic banking products and services to ensure safety and security, increase customer convenience and satisfaction.
As a result, Bac A Bank’s pre-tax profit reached over 1,060 billion VND, not increasing as strongly as in the fourth quarter but still maintained at a level close to the previous year. This result is appropriate in the context of businesses striving to recover, the credit absorption capacity of the economy is at a low level.
In terms of safety operating indicators, Bac A Bank’s liquidity remains stable, the bad debt ratio, although it has increased to 0.92%, is still among the lowest in the industry thanks to good risk management capability. The bank’s safety operating indicators continue to ensure the limits prescribed by the SBV.
In addition, in order to improve asset quality as well as create a solid buffer, the bank has actively set aside more than 152 billion VND in provisions, an increase of nearly 36% compared to 2022. The bank’s bad debt coverage ratio reached 131% at the end of the year, at a high level according to industry practice (the industry average is 93%). The bad debt coverage ratio reflects the bank’s ability to defend against fluctuations related to bad debts. Accordingly, the higher this ratio, the more proactive it is in making provision, managing bad debt to ensure smooth banking operations.
At the end of 2023, although some targets did not reach 100% of the plan set at the beginning of the year, the bank continued to maintain stable business operations, improve risk management capacity and financial capacity, … in the right direction and effectively.
