·         The polarized earnings growth among banks for 1Q22 is within our expectations. We think that the trend will continue in 2Q22 before banks benefit from the low comparison base and lifts in credit growth quota in the second half of 2022.

·         Quoted deposit rates have been going up at the private banks. This was also reflected in the ramping up of average deposit rates in 1Q22 in comparison to 4Q21. Meanwhile, the state-owned banks have maintained the rate level since mid-2021. We witness a slowdown in the pace of rising deposit rates at top private banks, thereby, expecting quite stable quoted deposit rates in 2Q22. Rates will still go up from this level to the year end.

Resilient growth at large banks, struggling at smaller ones

Amid the rising concerns which impacted the stock prices, several banks announced their 1Q22 operating performance. We witness polarized earnings results as expected in the 2022 Strategy Report.

With nine banks announcing their financial statements at the time we collected data, we estimate an aggregate net interest income growth of 21%, total operating income growth of 36% and PBT growth of 70%. In which, VPB posted abnormal earnings growth thanks to the bancassurance upfront fee.

Growth of earnings components suggests major contributions of non-interest income, CIR and credit costs. NII growth was robust at large private banks given strong year-to-date credit growth and the continuous mismatch between the pace of credit and deposit expansion.