HDBank, listed on the Ho Chi Minh Stock Exchange under the ticker HDB, is one of Vietnam’s leading commercial banks. Established in 1990, the bank is known for its focus on serving small and medium-sized enterprises and retail consumers.
In the first half of 2024, HDB saw a significant uptick in its performance, with total operating income and pre-tax profit increasing by 32.9 percent and 48.9 percent year-over-year, respectively. This growth was primarily attributed to a more stable macroeconomic environment and a rebound in credit demand compared to 2023 during which banks in general faced a challenging financial environment with rising interest costs on deposits outpacing lending income.
In the first half of 2024, the bank’s credit grew by 13 percent, which is double the industry average of 5.93 percent from the end of 2023 to July 2024, amounting to US$584 billion.
HDBank’s credit growth was primarily driven by small and medium-sized enterprises, with lending to this sector increasing by 20.4 percent since the beginning of the year. In contrast, retail and consumer loans saw more modest growth of 3.2 percent and 5.3 percent, respectively. These loans were concentrated in manufacturing and trading activities, with real estate lending growing at a slower pace due to the sluggish recovery in the property market.
However, non-interest income dropped sharply by 54.5 percent year-over-year, due to a decline in bancassurance fee revenue. This was in line with a broader decline in bancassurance commissions as a result of a spate of negative publicity in 2023.
Of note, HDB’s stock price has experienced a 47 percent increase from the beginning of the year to last Thursday.
Disclosure: The author does not have any financial interest in HDB stock.