The trend of "banking" the securities industry is forecast to take place strongly as lending operations play an increasingly important role in the operations of securities companies.
The stock market prospered in the first quarter of the year, and the securities company's operations also operated smoothly, especially lending. According to statistics, securities companies earned a total of VND 5,200 billion in interest from loans and receivables in the first quarter of 2024, an increase of more than 8% compared to the previous quarter and nearly half the same period in 2023. This is also a record profit in the first quarter of 2024. a quarter that the securities group earns from lending activities.
Most securities companies recorded an increase in interest from loans and receivables in the first quarter of the year compared to the previous quarter and the same period in 2023. This revenue source at some securities companies such as TCBS, MBS, VPBankS even broke its peak in the first quarter/ 2024. Most notably, TCBS achieved nearly 573 billion VND in profit from lending activities, continuing to consolidate its No. 1 position in the industry. This is also the largest amount of interest from loans and receivables in a quarter that a securities company has ever achieved.
In the context of the proprietary trading sector fluctuating erratically with the market and making it difficult for brokerage to make a breakthrough due to fierce competition, lending operations are playing an increasingly important role in the operations of securities companies. Revenue from this segment usually accounts for about 25-40% of operating revenue, even the largest contributing segment at some securities companies. Regarding profits, interest from loans and receivables contributed up to 66% of total pre-tax profits of securities companies in the first quarter of the year.
Securities companies have a bumper income from lending activities thanks to the strong increase in demand for margin leverage in the first quarter of the year. According to statistics, outstanding loans at securities companies at the end of the first quarter of 2024 are estimated to increase by 26,000 billion VND compared to the end of 2023, reaching about 206,000 billion VND, the highest ever. Of which, outstanding margin debt is estimated at about 195,000 billion VND, an increase of 23,000 billion VND compared to the end of 2023 and is also a record number in the history of Vietnamese stocks, exceeding the period in the first quarter of 2022 when VN-Index was above peak 1,500 points.
In general, most securities companies recorded an increase in outstanding loans in the first quarter of 2024. Among the top, only VNDirect had a decrease in outstanding loans compared to the end of last year, but the decrease was not large. On the contrary, many securities companies have outstanding loans increasing by trillions such as TCBS, SSI, Mirae Asset, HSC, VPBankS, KIS, VCBS, BSC, etc. It can be seen that the sharp increase in outstanding loans mainly focuses on the group of securities companies with backing banks. conflict.
The trend of "banking" securities companies is forecast to grow more and more when businesses have difficulty accessing capital from bank credit channels and bonds. Meanwhile, the procedure for pledging and mortgaging assets that are stocks to borrow from securities companies is much simpler and more flexible. This brings benefits to all three parties (1) businesses can solve urgent capital needs; (2) Securities companies rapidly increase loan scale, bringing in large revenues; (3) The bank partially resolved the capital surplus when credit growth was limited.
According to Mr. Bui Van Huy - Director of DSC Securities Ho Chi Minh City Branch, the margin/capitalization ratio of Vietnam's stock market compared to other markets is currently very high, but the difference is the outstanding loan balance. The market has long been considered a partial replacement for the banking channel, to serve large shareholders borrowing capital through mortgaging shares instead of just being a leverage tool for stock investors.
Therefore, the increase in outstanding loans from individual investors only accounts for a part, the rest will come from organizations and big players in the market. Experts believe that the current context does not show major risks affecting the above group of investors and it is necessary to monitor more international and domestic factors.
Many preferential interest rate packages are launched
Interest rates are one of the factors driving margin debt balance to increase sharply in the past quarter. Since the beginning of 2024, many securities companies have launched margin loan interest reduction programs to stimulate investors' leverage. Typically, DNSE Securities offers margin loans with interest rates from 5.99% applicable to some stock codes; Yuanta has many interest rate packages at 8-9%; Mirae Asset also offers the lowest margin lending interest rate package of 7.99%...
SSI is also applying a program to reduce margin interest from 7.99% for customers from March 4 to June 30. Accordingly, customers whose outstanding balance increases by over VND 3 billion compared to the outstanding balance at the end of January 31 will enjoy a margin loan interest rate reduced by 1% compared to the current interest rate. For additional outstanding debt over 10 billion VND, the interest rate will be reduced by 2%, while SSI's current loan interest rate is 13.5% per year.
In general, without incentive programs, margin interest rates at many securities companies are still quite high, fluctuating between 13-15% for loans with a term of one year, such as VNDirect (13.8%). , VPS (14%), SHS (14.5%),... However, with savings deposit interest rates and lending interest rates of commercial banks forecast to continue to remain low, Margin lending interest rates are expected to tend to decrease in the near future.
Along with preferential margin interest rate programs, many securities companies also implement policies