Bac A Commercial Joint Stock Bank (Bac A Bank, HNX: BAB) has just announced its business results for the fourth quarter and the whole year of 2023. Accordingly, at the end of the fourth quarter of 2023, Bac A Bank brought in nearly VND 744 billion in net interest income, down 11.7% over the same period last year.

At the same time, the decline in non-interest income sources such as service activities and foreign exchange trading activities also partly affected Bac A Bank's business results.

Specifically, the bank's service activities recorded a profit of VND28.5 billion, down 10% over the same period; foreign exchange trading activities earned a profit of VND22.7 billion, while in the same period last year, this activity brought the bank VND55.6 billion.

Notably, during the period, Bac A Bank earned a large profit from investment securities. This activity brought the bank a profit of nearly VND255 billion, an increase of 254% over the same period last year.

The bank's other operations also reversed from a loss of VND3.5 billion in the fourth quarter of 2022 to a profit of VND76 billion. Income from capital contributions and share purchases also increased rapidly, bringing the bank VND10.9 billion.

Bac A Bank's total operating income in the fourth quarter was VND1,136.7 billion, up 13.6% year-on-year. After deducting operating expenses, Bac A Bank earned VND610 billion in net profit from business activities, up 88% year-on-year.

As a result, although during the period, the bank increased its credit risk provision by 2.5 times compared to the previous year to more than VND 103 billion, Bac A Bank still reported pre-tax profit of nearly VND 510 billion, up 57.4%; after-tax profit of VND 410 billion, up 57.9% over the same period in 2022.

Accumulated for the whole year of 2023, Bac A Bank recorded net interest income of VND 2,389 billion, down 5% compared to the previous year. During the year, this bank increased its credit risk provisioning expenses by 41% to nearly VND 196 billion and reversed VND 43 billion. Bac A Bank's pre-tax profit remained almost the same as the previous year at VND 1,060.8 billion; corresponding after-tax profit only increased slightly by 2.52% to VND 854 billion.

In 2023, Bac A Bank set a target of after-tax profit of VND 880 billion. Thus, by the end of the year, the bank has only achieved about 97% of the profit target.

As of December 31, 2023, Bac A Bank's total assets were recorded at VND 152,268 billion, an increase of 18% compared to the beginning of the period. Of which, deposits at other credit institutions of the bank reached VND 13,602 billion, an increase of 23%; loans to credit institutions increased from VND 858 billion in 2022 to VND 1,760 billion; customer loans increased slightly by 6% to VND 99,853 billion.

Regarding loan quality, as of today, the bank's total bad debt is nearly VND916 billion, while at the end of last year, the total bad debt was only VND513.8 billion. This mainly comes from the sharp increase in substandard debt (group 3 debt) and doubtful debt (group 4 debt) of the bank.

Specifically, the bank's group 3 debt increased by 305% to nearly 171 billion VND; group 4 debt also increased 4.6 times from nearly 50 billion VND to nearly 230 billion VND.

Although the bad debt did not increase as strongly as the two groups above, it also recorded an increase from VND 422 billion to VND 515 billion. This pushed the bad debt/loan balance ratio of Bac A Bank up from 0.55% at the beginning of the year to 0.92% .