Banks suffer big losses from securities trading in 2022

Illustrative image (Photo: VNA)

Many banks reported negative results in securities trading and investment in 2022 due to the interest rate hike, the exchange rate uncertainty, the sharp decline of stock indices and the ‘freezing’ of the corporate bond market, cafef.vn reported.

At State-owned VietinBank, most of its main business segments experienced positive development in the last quarter of 2022. The bank’s net interest income rose by 23.6% to 12.85 trillion VND and the net income from service activities increased by 53% to more than 1.78 trillion VND while the net income from foreign exchange trading was 1.123 trillion VND, up by nearly 2.5 times year-on-year.

However, VietinBank’s proprietary trading made a loss of 126 billion VND in 2022. The result was much worse than the previous year when the bank made a profit of 720 billion VND in the business segment.

Another State-owned big player Vietcombank was also under the same trend. Though the bank’s net interest income grew by 38.8% to 14.8 trillion VND, its proprietary trading in 2022 made a loss of 115 billion VND, while it made a profit of 137 billion VND in 2021.

Techcombank also had proprietary trading seeing a loss of 241 billion VND in 2022, against a profit of 152 billion VND in 2021.

Sacombank also recorded negative results from proprietary trading. Specifically, the bank lost 20 billion VND from the activity in 2022, while in the previous year it made a profit of 163 billion VND.

TPBank’s pre-tax profit in 2022 was nearly 7.83 trillion VND, up 30% against the previous year, but the bank’s net income from proprietary operation fell by 70%.

According to the quarterly consolidated financial statement recently released by ACB, the bank’s pre-tax profit in 2022 was more than 17.11 trillion VND, up 43% year-on-year, thanks to a decrease in credit risk provisions and an increase in income from service activities (up 22% to 3.53 trillion VND) and from foreign exchange trading (up 20% to 1.05 trillion VND). However, the bank’s securities trading segment plummeted by up to 92%.

Many other banks such as VPBank, SHB and ABBank all recorded lower securities business results compared to 2021.

Fiin Ratings attributed the banks’ negative results in securities trading and investment to the interest rate hike, the exchange rate uncertainty, the sharp decline of stock indices and the ‘freezing’ of the corporate bond market.

Closing the session at the end of 2022, VN-Index and HNX-Index decreased by 32.7% and 56.7%, respectively, compared to the beginning of the year, which caused the stock portfolio held by banks and their subsidiaries of which business results are consolidated on the banks’ financial statements declined sharply./.