Sustaining stable business performance amid Covid-19

Manh Hai

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has released its financial report for Q2- 2020. The bank’s business performance remained stable despite the turbulent business climate resulting from the Covid-19 pandemic.

Over the first six months of 2020, due to the impact of the Covid-19 pandemic and other cyclical factors, BIDV’s deposits and outstanding loans increased slightly compared to the beginning of the year. Off-balance sheet debt collection faced difficulties and profit before tax decreased over the same period. However, net service incomes and differences between revenue and expenditure were ensured. Of particular note, BIDV made sufficient provision for VAMC bonds in accordance with regulations and bought back all VAMC bonds in the first quarter of 2020.

As of 30 June, BIDV posted total consolidated assets that reached over VND1,446 trillion (USD62.3 billion), down 2.93 percent compared to the beginning of the year. Loans to customers of the commercial banking sector alone reached nearly VND1,104,484 billion (USD47.6 billion), an increase of over VND22,927 billion (USD988 million) or 2.12 percent year to date. The slow increase in outstanding loans at BIDV as well as at a number of other banks was mainly due to the impact of the Covid-19 pandemic. Credit packages designed to support customers affected by the pandemic need time to be effective as well as to reach market absorption capacity.

The non-performing loan ratio of the commercial banking sector alone was controlled at 1.89 percent. BIDV conducted an overall review of its customer base (financial position, solvency and level of damage of each customer) to take appropriate measures, ensuring safe and effective credit growth and controlling the NPL ratio.

Deposits by customers within commercial banking alone reached over VND1,111,400 billion (USD48 billion), up 1.52 percent compared to the beginning of the year. Deposits decreased in the first quarter of the year before stabilising again in the second quarter.

Consolidated figures as of 30 June showed that net service income (excluding guarantee fees) hit over VND2,264 billion (USD97.6 million), up VND296 billion year-on-year (equivalent to 15 percent). Income from forex trading reached VND832 billion (USD35.9 million), an increase of VND97.4 billion (equivalent to 13.3 percent) year-on-year. Income from trading securities and investment securities reached VND421 billion (USD18 million) and VND 669 billion

(USD28.8 million) respectively, with a net increase of VND333 billion and VND932 billion year-on-year, respectively.

Consolidated difference between revenue and expenditure reached more than VND14,596 billion (USD629 million) and profit before tax was VND4,454 billion (USD192 million). BIDV has made full provision for risks according to loan classification and operational safety indicators were ensured according to regulations.

BIDV said it would focus on closely monitoring the system situation, reviewing the impact of the pandemic towards increasing non-interest income, strengthening e-banking services, maximising income sources and controlling costs.

BIDV continues to be one of the pioneers in supporting communities affected by the Covid-19 pandemic. The bank has rendered timely efforts to support businesses and local people through banking operations and direct social security programs, contributing to stabilising daily living, production and business activities. BIDV plans to use VND3,500 -4,500 billion (USD172 million) in 2020 to support customers to overcome the impact of Covid-19.

A teller wearing face mask at a BIDV transaction office