In many banks, if the “subsidiaries” are removed, the parent bank has even negative growth.
Banks continued to report huge profits in the first six months of 2019 and many of them were the highest record ever. In particular, many banks took growth motivation from subsidiaries rather than parent banks. Even with some banks, if excluding subsidiaries, parent banks had negative growth.
The most typical case was Vietnam Technological and Commercial Joint Stock Bank (Techcombank). The profit of Techcombank’s parent bank in the first half of 2019 was lower than the same period, reaching 5.018 trillion dong, a slight decrease of two percent. However, thanks to a subsidiary with profit of 644 billion dong, an increase of more than eight times. Therefore, the consolidated profit of this bank reached 5.662 trillion dong, up nine percent.
Techcombank currently has three subsidiaries including Techcom Securities Joint Stock Company (TCBS), Vietnam Technological and Commercial Joint Stock Bank Asset Management Company Limited (Techcombank AMC) and Techcom Equity Fund (TCEF). In particular, TCBS had the most remarkable business results. Earnings Before Tax (EBT) of this securities company in the first six months of 2019 reached 595 billion dong, up 211 percent over the same period. TCBS had strong operations in bond brokerage and led the market share in the first half of 2019. The company’s main asset portfolio traded during the period was mainly Vingroup and Masan bonds.
In addition, TCEF also saw profit growth of four times in the first six months of 2019.
Another example was in Military Commercial Joint Stock Bank (MBBank), which also had strong growth in subsidiaries. While the parent bank’s profit only increased by 22 percent, its subsidiaries increased 82 percent to 569 billion dong in EBT. Accordingly, the subsidiaries were the main growth driver in this bank, helping the consolidated profit increase by 27 percent to 4.875 trillion dong.
MBBank has six subsidiaries, in which insurance companies had a strong growth. The bank has not announced the business results of MB Ageas or Military Insurance Corporation (MIC), but according to MBBank’s financial statement, the consolidated bank’s service segment skyrocketed mainly due to insurance business in subsidiaries.
