A transaction branch of Vietcombank. File photo

HÀ NỘI — Despite a slowdown this year, bancassurance and payment fees are expected to rise and help banks’ service revenue increase in 2021.

According to Viet Dragon Securities Company (VDSC), service revenue growth at listed banks slowed significantly in the first half of 2020, to only 9.9 per cent from 42.1 per cent in the same period last year.

Most listed banks reported a low service fee growth of below 10 per cent in the period, except Techcombank and VPBank which maintained a high growth of more than 40 per cent thanks to their diversified service fee structure.

VDSC attributed the slowdown to a decrease in bank services including bancassurance, trade finance and foreign exchange.

Besides, the reduction was also due to banks’ decision to offer some free payment service fees to aid customers amid the COVID-19 pandemic.

However, VDSC forecast the banking services segment would still have a great growth potential next year.

Accordingly, bank income from payment and card fees are expected to maintain growth momentum in 2021 due to the trend of encouraging non-cash payments, along with the orientation of banks to focus on retail and digital transformation investment.

Statistics from the Vietnam Bank Card Association show that the total numbers of cards in circulation and card accounts at banks was growing in recent years.

In addition to the payment channel, bancassurance fees were expected to continue to be one of key drivers for the banks’ service revenue next year, thanks to a rising number of customers, VDSC forecast.

According to statistics of the Vietnam Insurance Association (IAV), the total revenue of life insurance premiums in the first half of 2020 reached VNĐ55.95 trillion, an increase of 19 per cent over the same period last year.

The rise was lower than the 25-32 per cent growth rate in the last seven consecutive years due to the influence of the COVID-19 pandemic, but VDSC believes the growth has been showing signs of recovery and the bancassurance segment would continue to grow well and be the main driver of banks’ service income.

Techcombank, VIB and Military Bank are currently the top three gainers in life insurance premium revenues in the banking industry. However, VDSC expects the market share will change next year when many new players with high reputation and large customer scale, such as Vietcombank and ACB, will also participate more actively in the business segment.

With the expected rise of payment and bancassurance fees again next year, VDSC anticipated the growth of service revenue of listed banks would reach 25 per cent in 2021 from 12 per cent in 2020. — VNS