Q3 2023 Banking Earnings Wrap-up - Slow credit growth and high NPL formation pressures NIM

- 9M 2023 industry credit growth was slow at 6.92% on weaker-than-expected economy but within the sector there was a high divergence in credit growth between banks. 

- Industry deposit growth in 9M 2023 was broadly in line with credit growth at 5.8%, driven by the retail segment. Among the banks in our coverage, HDB and VPB experienced abnormally high deposit growth to prepare funding to accommodate anticipated higher credit growth in the coming months.

- Q3 2023 aggregate NIM of banks in our coverage decreased 23 bps QoQ with QoQ decreases in both funding costs and IEA yield. CASA ratios improved slightly QoQ in Q3 2023 due to lower interest rates.

Powered by Froala Editor