ex. Game, Music, Video, Photography

Vietnam bank stocks downgraded on expectations of lower earnings

Securities companies have reduced target prices of bank shares by 10-20 percent, based on result of lower income forecasts.

Ngày đăng: 18 tháng 9, 2021
Cập nhật: 22 tháng 1, 2023
Lượt xem: 325306592
Nguồn: vnexpress

Viet Capital Securities (VCSC) recently lowered share price expectations on a series of bank stocks compared to numbers it had published earlier.

According to VCSC’s latest report on HCMC Development Bank (HDBank), the securities company has set a target price of VND31,800 ($1.37) per share, down nearly 20 percent on its previous prediction.

The main reason for this adjustment is that credit growth is forecast to be lower for HD Saison, a financial company that is a joint venture between HDBank and Japanese securities group Credit Saison. The target price was also reduced as a result of falling loan yields at the parent company.

At the time of VCSC’s first report for HDB shares in June 2018, loan yields at HDBank were already falling. Loan yield for the first 9 months of the year was 12.1 percent, lower than the 12.6 percent in 2017.

The shares of BIDV, Vietnam's biggest bank by assets, are down by 15 percent in the latest publication from the last forecast.

The securities company lowered its 2018 and 2019 earnings forecast for BIDV as a result of net interest income forecasts showing a decline of 8.7 percent and 11.7 percent respectively.

At the same time, the company also raised provision costs for the bank by 5.5 percent this year and 4.5 percent for the next.

"We observed that debt settled, as well as accrued interests and receivables in the first 9 months of the year rose, showing that asset quality could go down at the bank," said Dinh Phuong Anh, an analyst with VCSC said.

For other banks, although recommendations remain positive, target prices have also been lowered by between 10 and 20 percent.

The shares of Vietcombank (VCB), the third largest bank by assets, are down to VND64,000 ($2.76) in the latest publication, down 11 percent from the last forecast. The estimated price of Techcombank (TCB) stocks is also down 20 percent to VND34,600 ($1.48) per share.

The Ho Chi Minh City Securities Corporation (HSC) recently lowered its forecasts of Eximbank (EIB) shares. The target price of EIB was adjusted down from VND18,000 ($0.78) to VND14,700 ($0.63) as its 9 months performance report showed restructuring delays.

According to many experts, the performance of the banking sector is unlikely to maintain the strong growth of the last 3 years.

HSBC Vietnam CEO Pham Hong Hai said that profitability of the sector will peak in 2018 and gradually fall later. The central bank may not want to maintain such high credit growth in the near future, and could work to bring it down, he explained.

Vietnam’s credit growth in the first 11 months of this year was 15.3 percent, according to the National Financial Supervisory Commission.

The country’s banking sector posted an estimated 18.17 percent loan growth in 2017. It has targeted growth of 17 percent this year.

In addition, an important factor that will affect the profitability of banks in the following years is the imminent official application of Basel II, which will impact on the banks’ strategies.

The second Basel Accords, or Basel II, prescribe capital of 8 percent of risk-weighted assets for all financial institutions, including in Vietnam, to cover operational risks.

By this time, banks will not be able to rely so much on credit income, but have to move to other activities. Profit will most likely fall to levels below this year, he said.

Hai said that from 2019 onwards, bad debt may re-emerge as a problem for banks after the recent credit growth and the instability of the global financial markets. This was another reason banking profits will likely see a downward trend next year, he added.

State Bank Governor Le Minh Hung said recently that bad debts and potential bad debts of the sector had amounted to 8.61 percent of total credit by the end of September.


Tin tức liên quan

 Vietnamese biggest pro-Trump group among Asian Americans
news 21/03/2021

Vietnamese biggest pro-Trump group among Asian Americans

news | 25376678

Vietnamese Americans are the only Asian American group that prefers Donald Trump to Joe Biden in the upcoming presidential election, a survey has found.

 Vietnam repatriates 344 citizens from Singapore
news 27/03/2021

Vietnam repatriates 344 citizens from Singapore

news | 115646641

A Vietnam Airlines flight Sunday repatriated 344 Vietnamese citizens from Singapore, currently the biggest Covid-19 hotspot in Southeast Asia.

15 million Vietnamese still sparking up the tobacco
news 09/09/2021

15 million Vietnamese still sparking up the tobacco

news | 260856606

Vietnam has one of the highest smoking rates in the world.

 Vietnam football star requires second surgery
sports 14/09/2021

Vietnam football star requires second surgery

football | 312546604

Star defender Doan Van Hau will have to undergo a second surgery for his knee injury, with an earlier inaccurate diagnosis affecting treatment and recovery, doctors say.

Vietnam cities to monitor South Korea arrivals for coronavirus
news 15/09/2021

Vietnam cities to monitor South Korea arrivals for coronavirus

news | 316286610

With reports showing the novel coronavirus is spreading fast in South Korea, Vietnam seeks to control travel flow from the country.

 Analysts, authorities make contrasting claims about high Vietnam gold prices
business 17/03/2021

Analysts, authorities make contrasting claims about high Vietnam gold prices

economy | 83265963

A supply shortage in Vietnam has widened the difference between domestic and global gold prices, according to experts, but authorities reject the claim.

Link Tài Trợ - Sponsored Links

Công Thức Vật Lý
Loading…