The consolidated audited financial statements of 2019 had been announced by the Vietnam Bank for Agriculture and Rural Development (Agribank), noting a remarkable detail. Accordingly, the outstanding loans of the industry of ‘Agriculture, forestry and fishery’ unexpectedly lost the number one position in Agribank’s sector lending structure.
Since Agribank made public its financial statements with loan classification by industry (2017), the ‘Agriculture, forestry and fishery’ industry had always been the industry with the highest loan balance in the structure of borrow.
However, at the end of 2019, the No.1 position belonged to ‘Wholesale and retail trade; repair of automobiles, motors, motorcycles and other motor vehicles’ with a loan balance of over 314 trillion dong, accounting for 28.04 percent of total loans. Meanwhile, the ‘Agriculture, forestry and fishery’ industry had a loan balance of over 302 trillion dong, accounting for 26.93%.
Only half a year ago, at the end of June 2019, the ‘Agriculture, forestry and fishery’ industry was still leading in outstanding loans with over 293 trillion dong, accounting for 27.81%. Meanwhile, the industry’ Wholesale and retail trade; repair of automobiles, motorcycles, motorbikes and other motor vehicles’ had a loan balance of less than 267 trillion dong, accounting for 25.33%.
In turn, in the second half of 2019, Agribank had strongly promoted lending in the ‘Wholesale and retail trade; repair of automobiles, motors, motorcycles and other motor vehicles,’ while the industry ‘Agriculture, forestry and fishery’ only slightly increased balance.
In parallel with the restructuring of loans, 2019 was a successful year for Agribank in terms of profits and bad debts.
With 14.116 trillion dong of pre-tax profit, Agribank became the ‘runner-up’ of banking profit last year, second only to Vietcombank. Compared to 2019, the profit increase was up to 92%.
Leading this impressive profit growth was the uptick in most key business segments. Specifically, the credit segment brought about 42.66 trillion dong of net interest income, up 4.4%. The service sector earned 4.591 trillion dong in net profit, up 22%. The foreign exchange segment brought 1.030 trillion dong of net profit, up 46%. Besides, there was 11 trillion dong of net profit from other activities (mainly revenue from risky debt), growing by 37%.
Not only had the revenue increased, but the reduction of provision expenses also had a positive impact on the profitability of this Bank. In 2019, this cost was at 20.570 trillion dong, down by over 1.1 trillion dong compared to 2018.
About bad debt, last year, Agribank bought all bad debts at the Vietnam Asset Management Company (VAMC). The Bank’s non-performing loan (NPL) ratio at the end of 2019 was only 1.56%, ranking the bottom in the banking system.
