Most banks reported profit growth in the first nine months, but bad debts posted a double-digit rise due to the impacts of the Covid-19 pandemic. VPBank saw its pre-tax profits surge by nearly 30 percent year-on-year to VND9.4 trillion ($402.75 million) as it managed to cut operating costs by nearly 6 percent. But its bad and doubtful debts rose by 15 percent to over VND10 trillion.
Military Bank’s profits rose by nearly 7 percent to VND8.13 trillion while its bad and doubtful debts rose by 39 percent.
ACB’s profits were up nearly 15 percent at VND6.41 trillion while bad and doubtful debts rose by 71 percent.
But some banks also reported declines in profits.
Vietcombank continued to be the most profitable, but its pre-tax profit fell by over 17 percent to VND15.96 trillion as revenues remained flat or declined but it had to hike provisions for bad debt by 25 percent.
Bad and doubtful debts were up 15 percent to nearly VND7.9 trillion.
Sacombank’s profits fell by nearly 7 percent to VND2.33 trillion as provisions for bad debts rose by nearly 70 percent.
Financial data provider FiinGroup had said in a report in July that the financial health of businesses and their ability to repay debts have declined and people’s incomes have dropped, and these factors could affect the quality of credit in the near future.
As lenders gradually have to increase provisions for doubtful debts, their profits in the coming quarters could slump, it added.