Bank tellers and customers in Hanoi.

The financial statements in Q1 2022 of many banks published recently showed that besides the rapid growth of credit, revenue from services contributed significantly to the banks’ positive business results in the period.

Typically, in Q1 2022, the Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) gained 2.58 trillion VND of net profit from services and 1.52 trillion VND of net profit from foreign exchange trading.

For Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), the service revenue in Q1 2022 reached 1.79 trillion VND and 1.53 trillion VND, up 35 percent and 83 percent compared to the same period of last year, respectively.

Many other private joint-stock banks such as Vietnam Prosperity Commercial Joint Stock Bank (VPBank), HCM City Development Commercial Joint Stock Bank (HDBank), Military Commercial Joint Stock Bank (MB), Asia Commercial Joint Stock Bank (ACB), Vietnam International Commercial Joint Stock Bank (VIB), Maritime Commercial Joint Stock Bank (MSB) and Saigon Hanoi Commercial Joint Stock Bank (SHB) also recorded many positive results from service activities in Q1 2022.

MB, for example, saw an increase of 4.8 percent to nearly 1.12 trillion VND in the profit from services thanks to a large contribution from bancassurance channel. The bank’s profit from foreign exchange trading grew by 98 percent to 467 billion VND.

Meanwhile, MSB also achieved more than 335 billion VND of net profit from service activities in Q1 2022, up nearly 175 percent over the same period of 2021, mainly thanks to the segments of credit cards, insurance services and payment activities.

For VIB, the non-interest income was 650 billion VND, contributing 16 percent to the bank’s total operating income.

Among the service activities of banks, bancassurance channels accounted for a fairly large proportion in Q1 2022 and contributed considerably to the service revenue structure of many banks. The income is expected to further increase next time.

Vice-chairman of Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) Pham Doan Son said the bank is negotiating with its partners about bancassurance as the insurance contract between the bank and Dai-ichi Life expires in May 2022.

Banking expert Nguyen Tri Hieu said that diversifying revenue sources is one of the targets that many banks have focused on for the past few years, especially in the past two years when the traditional source of revenue from credit activities has slowed and posed higher risks due to the pandemic.

“Increasing revenue from services has helped banks operate more healthily and sustainable, and minimise risks. The change will also contribute to gradually realising targets set out in the development strategy of the banking industry” - Hieu said./.