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Banking & Finance

BIDV's Q1 profit at $80mn, bad debts at 2.14%

Released at: 14:11, 03/05/2017

BIDV's Q1 profit at $80mn, bad debts at 2.14%

Illustrative image (Source: bidv.com.vn )

Consolidated financial report for first quarter reveals host of positive indicators, except for securities investment activities.

by Duy Anh

BIDV’s after-tax profit rose 10 per cent year-on-year to VND1.82 trillion ($80 million) in the first quarter of this year while its bad debts increased slightly to 2.14 per cent, the bank’s consolidated financial statement for the period shows.

As at March 31, its total assets were up 2 per cent to VND1,026 trillion ($45.1 billion). Customer lending rose 4.7 per cent to VND747 trillion ($32.85 billion) and deposits 5 per cent to VND762.4 trillion ($33.53 billion).

Net profit from operating activities stood at VND4.6 trillion ($202.3 million), equivalent to 114 per cent of the amount a year ago. Risk provision costs surged 18 per cent year-on-year to VND2.35 trillion ($103.35 million). After-tax profit, therefore, came in at VND1.82 trillion ($80 million), up 10 per cent year-on-year.

Within a 20.7 per cent year-on-year rise in interest income from VND5.64 trillion ($248 million) to VND6.8 trillion ($299 million), foreign currency trading was up 36 per cent to VND122.4 billion ($5.4 million) while securities trading rose 28.4 per cent to VND104 billion ($4.6 million). Income from services, meanwhile, increased 14 per cent year-on-year to VND574 billion ($25.2 million).

Notably, only securities investment activities continued to record losses, of VND67 billion ($2.95 million), a 56 per cent rise compared to VND43 billion ($1.9 million) in the first quarter of last year.

Its bad debt ratio rose from 1.99 per cent as at the end of 2016 to 2.14 per cent at the close of the first quarter. Total debts from Group 3 to Group 5 (sub-standard debts, doubtful debts, and potentially irrecoverable debts) increased by VND1.8 trillion ($79 million) from VND14.4 trillion ($633.3 million) as at December 31 to VND16.25 trillion ($714.7 million) as at March 31.

During the bank’s annual general meeting on April 22, it secured shareholders’ approval for its plan to pay a 7 per cent cash dividend for 2016, to be paid in the second quarter.

With the State, via the central bank, holding a stake of up to 95.28 per cent in BIDV, the Ministry of Finance is expected to receive more than VND2.2 trillion ($96.8 million) in cash from the dividend payout. Last year, BIDV paid an 8.5 per cent cash dividend to shareholders, with the State receiving VND2.7 trillion ($118.7 million).

According to its plan, BIDV will increase its charter capital from the current VND34.2 trillion ($1.5 billion) to VN38.6 trillion ($1.7 billion) during this year, in three stages.

Last month, Prime Minister Nguyen Xuan Phuc asked BIDV to continue its pioneering role in supporting business investment abroad, especially in Laos and Cambodia, and becoming a leading commercial bank in the region.

He urged the bank to engage in the reform of credit institutions, whose focus is settling bad debts and banks with poor performance, as the largest joint stock commercial bank in the country. 

At the same time, the bank should continue renovating and improving its financial management, operational effectiveness, and competitiveness, thus entering the list of the Top 25 largest commercial banks in ASEAN. 

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