Provisions for bad loans eat 98% of BaoVietBank’s Q1 profit, 90% of bad debts likely to lose capital

In the first quarter, all business lines of BaoVietBank grew well compared to the same period last year.

Net interest income reached nearly VND430 billion, 3.6 times higher than the same period. Service revenue was nearly VND166 billion, 10 times higher than the same period. Revenue from foreign exchange trading and trading of investment securities also increased.

As a result, net profit from operating activities in the first quarter reached more than VND392 billion, while in the same period it was only nearly VND7 billion. However, the bank set aside VND384 billion for credit risk provision, resulting in a pre-tax profit of more than VND8 billion. However, this profit figure still increased by 20% compared to the same period.

BaoVietBank’s total assets by the end of the first quarter increased by 4% compared to the beginning of the year, to VND88,218 billion. Notably, both lending and mobilization in the quarter recorded negative growth. Loans to customers decreased by 4% compared to the beginning of the year, to VND39,672 billion. Customer deposits decreased by 1%, to VND52,068 billion.

The bank’s total bad debt as of March 31, 2024 was recorded at VND1,740 billion, a slight increase of 5% compared to the beginning of the year. However, the debt at risk of loss accounted for 90% of the bad debt. As a result, the bad debt ratio to outstanding loans increased from 4% at the beginning of the year to 4.39%.

Han Dong