Banks’ profit forecast to drop significantly in H2 2020 Banks’ provisions for risky loans will likely increase 48 per cent in H2 2020.— Photo plo.vn According to a recent report on the prospects of the banking industry in H2 2020 by Saigon Securities Incorporation (SSI)’s research division, SSI analysts believed that the rising provision will further reduce profits of banks. They estimated that banks would promote the provisions for new bad debts and restructured debts. Total operating income of the banking system is projected to decrease 4 per cent while provisions for risky loans will likely increase 48 per cent. The SSI estimated pre-tax profit of State-owned banks, including Vietcombank, BIDV and VietinBank, could decline 36 per cent, mainly due to the 59 per cent increase in provisions for risky loans in H2 2020. The rising restructured debts will make the net interest margin (NIM) fall further. The amount of bad debts and restructured loans will sharply increase by the end of the year. Based on the estimates of the State Bank of Viet Nam (SBV), about 23 per cent of the total outstanding loans were adversely hit by the pandemic in the first quarter of this year. When the… Read full this story
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