Banks suffered big losses from securities trading in 2022
At State-owned VietinBank, most of its main business segments experienced positive development in the last quarter of 2022. The bank’s net interest income rose by 23.6 per cent to VND12.85 trillion and the net income from service activities increased by 53 per cent to more than VND1.78 trillion while the net income from foreign exchange trading was VND1.123 trillion, up by nearly 2.5 times year-on-year.
However, VietinBank’s proprietary trading made a loss of VND126 billion in 2022. The result was much worse than the previous year when the bank made a profit of VND720 billion in the business segment.
Another State-owned big player Vietcombank was also under the same trend. Though the bank’s net interest income grew by 38.8 per cent to VND14.8 trillion, its proprietary trading in 2022 made a loss of VND115 billion, while it made a profit of VND137 billion in 2021.
Techcombank also had proprietary trading seeing a loss of VND241 billion in 2022, against a profit of VND152 billion in 2021.
Sacombank also recorded negative results from proprietary trading. Specifically, the bank lost VND20 billion from the activity in 2022, while in the previous year it made a profit of VND163 billion.
TPBank’s pre-tax profit in 2022 was nearly VND7.83 trillion, up 30 per cent against the previous year, but the bank’s net income from proprietary operation fell by 70 per cent.
According to the quarterly consolidated financial statement recently released by ACB, the bank’s pre-tax profit in 2022 was more than VND17.11 trillion, up 43 per cent year-on-year, thanks to a decrease in credit risk provisions and an increase in income from service activities (up 22 per cent to VND3.53 trillion) and from foreign exchange trading (up 20 per cent to VND1.05 trillion). However, the bank’s securities trading segment plummeted by up to 92 per cent.
Many other banks such as VPBank, SHB and ABBank all recorded lower securities business results compared to 2021.
Fiin Ratings attributed the banks’ negative results in securities trading and investment to the interest rate hike, the exchange rate uncertainty, the sharp decline of stock indices and the ‘freezing’ of the corporate bond market.
Closing the session at the end of 2022, VN-Index and HNX-Index decreased by 32.7 per cent and 56.7 per cent, respectively, compared to the beginning of the year, which caused the stock portfolio held by banks and their subsidiaries of which business results are consolidated on the banks’ financial statements declined sharply.
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