VietinBank, listed on the Ho Chi Minh Stock Exchange under the ticker CTG, is one of Vietnam’s largest state-owned commercial banks. In the first half of 2024, CTG’s total operating income rose by 11.3 percent, reaching US$1.6 billion.
Non-interest income fell by 12.6 percent to US$333.2 million, driven by a drop in bancassurance operations, in line with a broader decline in bancassurance revenue following negative publicity in 2023. In addition, securities trading revenue decreased 72.6 percent in contrast to the VN Index which increased by 10.2 percent and other financial institutions like MB Bank which had an eightfold increase in securities revenue year-over-year.
Also of note is that, pre-tax profit grew by only 3.4 percent, mainly due to a 20.2 percent increase in risk provision expenses year-over-year with non-performing loans jumping from 1.13 percent at the end of 2023 to 1.57 percent by the end of the second quarter of 2024. This was in line with a jump in bad debts across the board with the SBV reporting the on-balance sheet bad debt ratio of Vietnam’s banking industry stood at 4.94 percent by the end of May 2024, up from 4.55 percent at the end of 2023.
This elevated bad debt ratio is partly the result of prolonged effects from the two-year pandemic, which significantly impacted businesses, a sluggish real estate market, as well as broader economic challenges over the last two years.
Disclosure: The author does not have any financial interest in CTG stock.