Many banks have gained significant profit increases from foreign exchange (forex) trading this year, figures show.
According to banks’ Q3 2020 financial statements, 15 banks reported high profits in the business segment in the first three quarters of this year with some even posting rising rates of hundreds of percent over the same period last year.
Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) was the biggest earner with more than 2.96 trillion VND (128.6 million USD) of net profit from forex trading, up by 16.9 percent over the same period of 2019 and accounting for 8.6 percent of the bank’s total operating income.
Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) ranked second with 1.51 trillion VND of forex trading net profit, up by 27.3 percent over the same period of last year, contributing 4.7 percent to the bank’s total operating income.
Other large banks such as Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Military Commercial Joint Stock Bank (MBB) also posted significant profits from forex trading.
As for medium- and small-sized banks, though the proportion of profits from forex trading accounted for a modest rate in the banks’ total profits, the growth rate was impressive.
Tien Phong Commercial Joint Stock Bank (TPBank), for example, is one of the banks that achieved the strongest profit growth from forex trading in the period with a rise of 468 percent to 142 billion VND.
Similarly, Southeast Asia Commercial Joint Stock Bank (SeABank) also recorded a surge of 226.7 percent to 49 billion VND in forex trading.
The forex trading profit of Nam A Commercial Joint Stock Bank (NamABank) also soared to 51 billion VND in the first three quarters of 2020 from 19 billion VND in the same period last year.
Other banks such as Maritime Commercial Joint Stock Bank (MSB) and Saigon Hanoi Commercial Joint Stock Bank (SHB) gained more than 100 percent growth in forex trading profit in the past period, at 134 percent and 131.6 percent, respectively.
In the forex trading business, most of the net profit comes from the foreign currency spot trading, which means that the income comes from the gap between buying and selling prices.
The demand for foreign currency transactions of the economy were significantly expanded in the past nine months. According to the General Statistics Office, the country’s total export and import turnover reached nearly 389 billion USD in the last nine months, up 1.8 percent over the same period of 2019.
Besides, banks also conducted a large amount of foreign currency transactions with the State Bank of Vietnam when the central bank accelerated buying of the US dollar to increase the nation’s forex reserves.
In the past nine months, the central bank purchased about 14 billion USD, raising the total forex reserves to a record high level of 93 billion USD./.
By Vietnam News Agency (VNA)