WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Lending activities contribute most to profits of Vietnam’s brokerages
Ngoc Mai 14:18, 2019/11/05
This segment was also the only one in the brokerage sector that saw gross profit increase compared to the third quarter of last year.

The lending segment contributed the most with VND1.16 trillion (US$49.83 million) or 43% of total gross profit in Vietnam’s brokerage sector in the third quarter this year, according to Viet Dragon Securities Company (VDSC)’s latest report.

 

This segment was also the only one that saw gross profit increase compared to the third quarter of last year. On the contrary, the brokerage and services segment accounted for the least in total gross profit with VND386.4 billion (US$16.6 million) or 14.3% of the total.

Meanwhile, operating revenues and operating expenses reached VND6.04 trillion (US$259.46 million), up 14.6% year-on-year and VND3.33 trillion (US$143.03 million), up 52.8% year-on-year.

Even though revenues from the main business segments including lending and proprietary trading rose sharply in the July – September period, increasing 35% and 29% year-on-year, respectively, expenses from these two segments also skyrocketed by 59% and 140% year-on-year, respectively.

 

According to VDSC, the cost increase in the lending segment was because brokerages raised funds for lending activities. Meanwhile, the sharp increase in expenses of proprietary trading was due to the loss from financial assets (FVTPL), which increased by 164.4% year-on-year. The increase in FVTPL accounts for 50% of the increase in FVTPL of the 73 brokerage companies, stated the report.

Additionally, revenues from financial activities in the third quarter reached VND34 billion (US$1.46 million), a decrease of 76% year-on-year. However, because financial expenses declined sharply by 81% year-on-year, income from financial actives decreased by 47% year-on-year. Total income from operating and financial activities slid by 13% year-on-year.

While income fell, administration expenses slightly increased by 1.6% year-on-year to VND653 billion (US$28.05 million). The ratio of administration expenses over income from operating and financial activities added 3 basic points to 24%.

 

VDSC expected the lending segment will continue to contribute the most to total operating revenue in the fourth quarter because the current margin outstanding are 34% higher than the average of margin outstanding in the same period of last year. However, brokerages are competing for market share, especially foreign ones. Hence, it is expected that the average lending interest rate may decrease compared to the same period last year.

Contrarily, it is assumed that revenue from the brokerage and services and consultancy services segments will not improve much in the October – December period because: (i) the average daily trading value in October was 24% lower than the same period last year, and (ii) there are not many IPO or deals in the remaining months of the year.

RELATED NEWS
TAG: brokerage lending Vietnam profit VDSC
Other news
22:02, 2024/12/17
Regional, international financial centers mean boosters to Vietnamese economy: Deputy PM
Ho Chi Minh City envisions its financial center encompassing the money market, banking system, capital market, and derivatives market.
15:44, 2024/11/14
IFC sets record with US$1.6 in climate financing to support Vietnam’s green transition
The new commitments aim to bolster Vietnam's shift towards a low-carbon economy while enhancing private-sector resilience and competitiveness.
21:44, 2024/11/11
Vietnam's credit growth up 10% in 10 months
Vietnam’s central bank has set a credit growth target of around 15% this year.
08:08, 2024/10/05
Building Hanoi's smart city with smart banking
In Hanoi's smart city development strategy, smart payment and open banking ecosystems are critically important.
21:34, 2024/09/19
Vietnam stock market clears major legal hurdle to potential upgrade
Starting November 2, foreign investors will no longer be required to pre-fund 100% of their transactions, promising the removal of a major roadblock for Vietnam's market upgrade process.
17:29, 2024/09/01
Cashless parking in Hanoi: Good model fuels smart transport
Hanoi’s leaders believe that all that's left to do is act with the ultimate goal of serving people from smart transportation, armed with the mindset and solutions of a new global vision and thinking.