Hanoi (VNS/VNA) – Analysts at many foreign investment funds and local securities firms expect bank stocks to continue to post positive results in 2022.
Banking stocks have been performing impressively over the past few sessions, leading the market while most other groups of stocks have fallen.
Foreign investment funds and securities companies are optimistic about the outlook for banking stocks in 2022.
In a recent report, the overseas fund VinaCapital, citing the latest survey results from the State Bank of Vietnam (SBV), said that in the fourth quarter of 2021, the situation in banking business improved significantly compared to in the previous quarter. The banks also expect their business situation to continue to improve in the first quarter of 2022 and throughout 2022.
“Credit risk is expected to decrease slightly in 2022 compared to 2021. Therefore, we expect banking stocks to record positive results in 2022,” VinaCapital said in the report.
MB Securities Company (MBS) analysts also see promising growth in the banking sector after the disruptions caused by the COVID-19 pandemic thanks to favorable macroeconomic factors such as rapid economic growth, stable political situation and participation in many free trade agreements.
In addition, asset quality continued to improve thanks to SBV’s supportive policies and proactive strategy to ensure commercial banks’ asset quality. MBS also expects the bad debt ratio to improve in 2022, while the bad debt coverage ratio will remain stable.
As the SBV continues to ease monetary policy to keep interest rates low, the earnings picture for banks is more positive this year.
Capital raising activities are also one of the industry highlights in 2022, as a series of banks announced their intention to sell capital to strategic shareholders such as VPBank or Orient Commercial Joint Stock Bank ( OCB).
Meanwhile, Tran Thi Khanh Hien, director of analysis at VNDirect Securities, said the stock market is still attracting domestic investors with an increasing number of new accounts. And after realizing the risk of investing in stocks advertised on online groups, investors will return to basic stocks with transparent disclosure of information, and the banking sector will be the focus of attention.
However, Hien said the outlook for earnings growth in 2022 will be lower than in 2021 as banks have to balance risk control and expected earnings are only expected to grow by 19%, which is lower than in 2021.
According to the VNDirect expert, raising capital, extending foreign margin and changing trade are factors affecting bank stocks. In 2022, there will be no leading group and there will be divisions and inequalities of opportunity between banking stocks.
“And of course, bank stock prices are expected to see strong splits depending on each bank’s earnings growth rate and individual history,” Hien said.
Bullish business results
Ahead of the Tet holiday, many banks announced positive results in 2021 with optimistic targets, promising further breakthroughs this year.
In its fourth-quarter business results, OCB said the bank’s after-tax profit rose 24.6% year-on-year to VND4.4 trillion ($194.6 million) in 2021.
Its return on equity (ROE) and return on assets (ROA) remained at high levels, at 2.59% and 22%, respectively. OCB’s bad debt ratio was also in check, down 0.45 percentage points year-on-year to 0.97%.
The report showed that as of December 31, the bank’s total assets reached over VND 184.4 trillion, up 21% from the same period of 2020.
The results were achieved through comprehensive digitization and effective control of operating costs.
Similarly, despite a difficult year due to COVID-19, Saigon Hanoi Commercial Joint Stock Bank (SHB) still recorded a pre-tax profit of VND 6.2 trillion, up 90.3% from 2021, achieving 107% of the annual plan.
As of December 31, SHB’s total assets reached VND506.5 trillion, up 23% from the end of 2020. The bank’s registered capital was VND26.67 trillion, completing the capital plan, while its own equity under Basel II standards reached VND 53.2 trillion. .
In addition, after strict operating cost control, SHB’s cost-income ratio (CIR) declined slightly to 24.22%, making it one of the best cost control equity commercial banks. . Its individual bad debt ratio was managed at 1.3%.
SeABank (SSB) recorded an 89% year-on-year increase in profit before tax to VND 3.3 trillion, exceeding 135% of the established plan thanks to the diversification of revenue sources and good management of operations.
As of December 31, SeAbank’s total assets increased by almost VND 31.5 trillion compared to the same period of 2020 to reach VND 211.6 trillion./.