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Tag: Techcombank

  • Dollar moves up at most banks

    Dollar moves up at most banks

    On Monday, the U.S. dollar went up against the Vietnamese dong at most banks and the black market.

    Vietcombank sold the dollar at VND23,800, up 0.34% from Saturday.

    Eximbank sold the greenback at VND23,770, up 0.30%.

    The rate at Techcombank is VND23,800, up 0.21%, and at ACB is VND23,900, up 0.42%.

    The State Bank of Vietnam (SBV)’s reference rate is at VND23,645, down 0.02%.

    The dollar is sold at VND24,100 on the black market, up 0.27%.

    The greenback has gained over the dong by 3.84% since the beginning of the year.

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  • Dollar weakens against dong

    Dollar weakens against dong

    The U.S. dollar continued to depreciate against the dong on the black market Monday.

    It plunged 0.86% to VND24,220 at unofficial exchange points.

    The greenback fell 0.19% to VND23,825 at TPBank, and dropped 0.32% to VND23,713 at Vietinbank.

    Eximbank sold the dollar at VND23,740, up 0.17%.

    The rate at Techcombank was VND23,750, up 0.04%. It stayed unchanged at Vietcombank.

    The State Bank of Vietnam (SBV)’s set the reference rate is at VND23,655, down 0.01%.

    The dollar has gained 3.40% against the dong since the beginning of the year.

    The U.S. Dollar Index, which measures the greenback’s strength against major currencies, hovered around a three-month low of 105 points.

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  • Dollar drops against dong

    Dollar drops against dong

    TPBank let the dollar slide 0.004% to VND24,854. Techcombank sold it at VND24,852, down 0.004%.

    The State Bank of Vietnam set its exchange rate at VND23,671, also down 0.004%.

    The dollar was sold VND24,940 at unofficial exchange points, down 0.4% from Wednesday.

    The U.S. dollar was broadly weaker on Thursday as investors, encouraged by the prospect of a slower pace of interest rate hikes from the Federal Reserve, placed bets on riskier assets.

    The dollar index, which measures the greenback against six major peers, was down 0.066% at 105.830, after sliding 1% overnight.

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  • Dollar rises to all-time high against Vietnamese dong

    Dollar rises to all-time high against Vietnamese dong

    The U.S. dollar continued to strengthen and reached its historic high against Vietnamese currency Saturday.

    The State Bank of Vietnam (SBV) on Saturday morning set the reference rate for the Vietnamese dong at VND23,283, the same as Friday and VND50 higher than early this week.

    At commercial banks, the Vietnamese dong is at its lowest in history.

    Vietcombank, the country’s largest lender, has sold the U.S. dollar for VND23,795, up more than 3.8 percent from the beginning of this year.

    Top private player Techcombank’s rates were VND23,810, Eximbank’s were VND23,790, and Sacombank VND23,967.

    The SBV allows the Vietnamese dong to trade within a band of 3% on either side of the reference rate, which is based on eight currencies and set daily.

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  • Techcombank profits soar

    Techcombank profits soar

    Vietnam’s top private lender, Techcombank, reported a 59.6 percent rise in pre-tax profits for the first nine months of 2021 to VND17.1 trillion ($737.1 million).

    Loans outstanding were up nearly 16 percent for the year at VND321 trillion.

    The bank’s bad debt ratio was 0.57 percent, higher than at the beginning of the year but still much lower than the average industry rate.

    Its current account and saving account (CASA) ratio grew by 49 percent, among the highest in the industry, thanks to a six-fold rise in margin deposit.

    Provisions for bad debts were down 9 percent.

    In the third quarter alone, pre-tax profit climbed by 40 percent year-on-year to VND5.56 trillion, mostly from interest income, service fees and securities investment.

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  • 16 banks to lower loan interests amid Covid-19

    16 banks to lower loan interests amid Covid-19

    Sixteen commercial banks have agreed to reduce interests on existing loans of Covid-hit businesses from now until the end of the year.

    The banks include Vietcombank, Vietinbank, BIDV, Agribank, Techcombank, MB, VPBank, TPBank and Sacombank.

    Lowering interests is difficult, but this is the time when banks need to share the burden with businesses, said Nguyen Quoc Hung, general secretary of Vietnam Banks Association, at a meeting Monday.

    Agribank is committed to lowering its interests by one percentage point on average, while MB will do so for at least one percentage point.

    Sacombank will seek shareholder permission as lowering the interest by one percentage point is equivalent to 40 percent of its profit target for the year. Some other banks will do the same.

    But not all businesses will be eligible for the reduction. Bank leaders said they would focus on companies truly hurt by the pandemic

    “Real estate companies with large profits, export firms or individuals borrowing money to buy cars should not be eligible for the reduction,” said Deputy Director of Techcombank Pham Quang Thang.

    He added companies that are essential to the economy with a large workforce should be eligible.

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  • Banking sector eyes growth potential

    Banking sector eyes growth potential

    Vietnam Report JSC recently announced the nation’s Top 10 prestigious and effective public companies for 2021 with six banks including Vietcombank, ACB, VPBank, VIB, MBBank and Techcombank.

    Over the past two years, these banks have been recognized by economists and investors for their financial strength and communication capacities, their growth potential, level of sustainable development, quality of corporate governance and the positions in the industries.

    By the end of June 10, the banking industry accounted for 34 percent of HCMC Stock Exchange market capitalization with stock prices growing 18 percent in one month, 40 percent in three months, and 77 percent in six months, respectively.

    According to analysts, the above-mentioned banks have helped the banking industry affirm its position as one of the major pillars of Vietnam’s economy as the sector has contributed to regulating financial supply and demand for businesses and individuals, especially in the context of the economy being challenged by the Covid-19 pandemic.

    A JP Morgan report showed Vietnamese banks offer the best combination of growth and return on equity (ROE) in ASEAN at 18 percent, double that of other countries in the bloc.

    According to analysts, there are three growth drivers for the strong growth of the banking industry in the medium and long-term including the strength of the local economy, self-improvement and digital transformation.

    According to the World Bank, though Vietnam has been affected by the Covid-19 pandemic, the local economy still boasts many positive achievements, demonstrating its sustainable internal strength.

    Meanwhile, Vietnam is among the few economies predicted to grow positively in the coming years with major drivers being domestic production, along with consumption and exports. The banking industry, with its role as a financial support for the whole economy, is also forecast to continue growing in resonance with the national economy.

    At the same time, Vietnam’s population is expected to reach 120 million by 2050, an increase of over 20 percent compared to the present, with the middle-class proportion to double from 13 percent to 26 percent by 2026. That will open up golden opportunities for banks especially those that have considered retail business a core area.

    Currently, Vietnam International Bank (VIB), Asia Commercial Bank (ACB), Saigon Thoung Tin Commercial Joint Stock Bank (STB), Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and Military Commercial Joint Stock Bank (MBBank) are recognized as five leading private banks with top retail loans.

    Notably, VIB and MBBank rank top with a compound growth rate of 49 percent and 31 percent respectively over the past five years. VIB is also considered the leading retail bank as its outstanding retail balance accounts for over 86 percent of the total outstanding balance, of which over 95 percent of retail loans have collateral.

    The banking industry has been experiencing positive changes in recent years. The dynamic business model, effective application of digital transformation and significant improvement in internal strength have brought impressive business results.

    In addition, the State Bank of Vietnam has accelerated the application of international risk management standards. That has contributed to improving the transparency of information, enhancing the prestige of local banks to domestic and international investors.

    The below table, sourced from audited financial reports of relevant banks from 2016 – 2020, mentions key financial indicators that clearly show the top six banks obviously stand out from median industry performance.

    Banks % ROE % ROA % CIR % NPL & VAMC % CAR CAGR Profit before tax 2016-2020 (%)
    VIB 29.6 2.2 40 1.7 10.1 70
    ACB 24.3 1.9 42 0.6 11.1 55
    VPB 21.9 2.6 29 3.4 11.7 27
    VCB 21.1 1.4 33 0.6 9.6 28
    MBB 19.1 1.9 39 1.1 10.4 31
    TCB
    18.4
    		3.1 32 0.5 16.1 41
    Industry median 18.8 1.6 39 1 10.8 39

    Quickly embracing digital transformation

    The banking sector’s strong growth in recent years is also attributable to the endless efforts of local banks in quickly embracing digital transformation. The banks that have actively participated in digital transformation will meet the increasing needs of customers while launching new products and services to both better serve their clients and increase business efficiency.

    Among them are VIB, MBBank and Techcombank, which have launched digital product packages like digital accounts, bank cards and completely free digital banking services to better facilitate customers.

    Amid the Covid-19 pandemic, digital solutions offered by these banks have assisted customers to make transactions and conduct basic banking services online instead of visiting branches or transaction offices.

    Analysts said banks that have a clear digitalization strategy will soon boost their market share and quickly lead the sector in terms of growth rate and quality of services. This has happened in markets like the U.S., Australia and Singapore.

    They added with the three above-mentioned growth drivers, sustainable development with many distinctive imprints of the six banks in the Top 10 is expected to be a bright spot for the banking industry and the Vietnamese economy in future.

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  • Techcombank expects profit growth

    Techcombank expects profit growth

    Vietnam’s largest private lender Techcombank targets an increase of 25 percent in this year’s pre-tax profits to a record VND19.8 trillion ($858 million).

    It expects credit to grow by 12 percent. Profits rose by 23 percent last year to VND15.8 trillion.

    It has undistributed profits of VND26.7 trillion, which it plans to use to fund operations. It has not paid dividends for the last 10 years.

    In a year when businesses struggled to repay loans due to the impact of the Covid-19 outbreak, the lender saw provisions for bad debts triple to VND2.66 trillion.

    Meanwhile, the bank’s board is seeking shareholders’ permission to make Ho Anh Ngoc, a brother of chairman Ho Hung Anh, a director.

    Ngoc, 39, has a doctorate in economics from Macquarie University in Australia. He has held several positions in the bank since 2017 and is currently chairman of the bank’s southern representative board.

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  • Techcombank profits sharply up

    Techcombank profits sharply up

    Vietnam’s largest private lender, Techcombank, reported a 23 percent rise in pre-tax profit last year to VND15.8 trillion ($683.62 million).

    It remained the third most profitable bank in the country behind state-owned Vietcombank and VietinBank.

    Its revenues rose 28 percent to VND27 trillion, nearly 70 percent of its interest income. The rest mostly comprised income from fees and securities investment.

    Provisions were up 2.8 times to over VND2.6 trillion as businesses, hit hard by the Covid-19 pandemic, struggled to repay loans.

    Credit grew at a whopping 23 percent against the country’s average of 10.14 percent.

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  • VPBank profits jump 26 pct

    VPBank profits jump 26 pct

    Lender VPBank reported a 26 percent jump in pre-tax profit last year to VND13 trillion ($564.24 million).

    The second and fourth quarters saw its highest ever quarterly profits of VND3.67 trillion and VND3.62 trillion.

    The lender’s profits exceeded those of state giant BIDV and private lender VIB.

    Its income was up 7.3 percent to VND39 trillion, with interest income accounting for nearly 83 percent.

    Services and securities trading were profitable, but foreign exchange trading caused a loss.

    Credit growth was 13.1 percent, and non-performing loans accounted for 2.9 percent.

    In 2019, VPBank had reported the sixth-largest pre-tax profit behind Vietcombank, Techcombank, Agribank, VietinBank, and BIDV.

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  • Big state banks gradually lose credit market share

    Big state banks gradually lose credit market share

    The credit market share of Vietnam’s three largest banks has fallen by 2.7 percentage points in the last two years due to liquidity constraints.

    The three, all state-owned and listed and the country’s largest by assets, Vietcombank, Vietinbank and BIDV, account for 34 percent of all loans outstanding, securities company VDSC said in a note last week.

    But this represents a 2.74-percentage-point fall even as the four largest non-state banks, Techcombank, VPBank, Military Bank (32.42 percent state-owned), and ACB, increased their share of loans outstanding by 1.6 percentage points.

    During the two years ending in the third quarter of 2020, VietinBank’s share fell by 1.96 percentage points, BIDV’s by 0.7 percent and VCB’s by less than 0.1 percent.

    The big fall in VietinBank’s market share is because it has been strapped for cash. There have been no major infusions of capital in the past few years, return on equity has been low, bonuses and employee welfare funds cause a big drain on resources, and the government appropriates much of its earnings.

    This situation has been exacerbated by Basel II standards, which prescribe a capital adequacy ratio (CAR) of 8 percent of risk-weighted assets for all financial institutions. Thus, to lend more, banks have to increase their charter capital.

    Though the Government has agreed to reduce its ownership in state-owned banks from 65 percent to 51 percent by 2025, it has yet to be implemented.

    But the government issued a decree in October allowing state-owned banks to pay dividends in stocks to increase their capital, helping them improve their growth prospects in the medium and long terms.

    According to the State Bank of Vietnam, banks’ total outstanding loans were worth VND8.69 quadrillion ($376.87 billion) at the end of the third quarter.

    Credit growth is expected to be 11 percent in 2020, down from 13.5 percent in the previous year.

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  • Techcombank posts double digit growth in profits

    Techcombank posts double digit growth in profits

    Techcombank has reported a 20 percent year-on-year surge in 2019 consolidated pretax profits to more than VND12.8 trillion ($552.8 million).

    The nation’s largest private lender by assets said in its latest financial report that the profit increased as credit risk provision halved to VND917 billion ($39.6 million) last year.

    While the bank’s credit activities continued to develop, its takings from other services remained the same as in 2018 at approximately VND3.25 trillion ($140.5 million).

    The bank saw a 15 percent increase in total revenues to around VND21 trillion ($909.9 million). By the end of 2019, Techcombank’s total assets were worth VND383.7 trillion ($16.5 billion), up 20 percent year-on-year.

    The bank’s bad debt ratio decreased from 1.75 percent at the beginning of the year to 1.3 percent.

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  • Techcombank to issue bonds worth $430 mln for Vietnamese

    Techcombank to issue bonds worth $430 mln for Vietnamese

    Techcombank plans to issue VND10 trillion ($430 million) in bonds through two private placements before the end of this year. The bonds will have a maturity date of up to three years with a par value of VND1 billion ($43,000) or a multiple of VND100,000 ($4.3), the bank said in a statement.

    The interest rate of the bonds, which are non-convertible and non-collateral, will be decided by the bank’s CEO at each issuance.

    The bonds are set to be issued in the third and last quarter of this year, with each issue worth VND5 trillion ($215 million).

    Buyers will include individuals and corporates, both local and foreign, but not credit organizations, foreign bank branches and member companies of credit institutions.

    Techcombank, the largest private bank in the country, said the bond issuance aims to increase its capital adequacy ratio and scale up operations.

    Techcombank’s plans follow a large number of banks that have been issuing bonds since earlier this year to increase their capital.

    Between January-August, banks issued over VND56 trillion ($2.42 billion) worth of bonds, accounting for half of bond issues, according to stock brokerage Saigon Securities Inc (SSI). 99.6 percent of bank bonds were bought, it added.

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  • Techcombank targets US$504.3 million in pre-tax profit

    Techcombank targets US$504.3 million in pre-tax profit

    Techcombank has targeted a pre-tax profit of more than VNĐ11.7 trillion (US$504.3 million) in 2019, representing a 10 per cent year-on-year increase.

    The target was approved at its annual shareholders’ meeting held in Hà Nội last week.

    It also planned to increase its total assets by 17 per cent to VNĐ375.8 trillion this year while holding outstanding loans at VNĐ245.4 trillion, up 32 per cent from last year. Its bad debts would be limited to less than 2.5 per cent in 2019.

    In 2018, Techcombank achieved high business results. Its pre-tax profit was up 32.7 per cent from the previous year at more than VNĐ10.6 trillion.

    These helped the bank achieve return on average assets (ROAA) of 2.9 per cent and return on average equity (RAE) of 21.5 per cent.

    Nguyễn Lê Quốc Anh, Techcombank’s CEO, said the two criteria had not only been among the highest among banks in Việt Nam but also surpassed big scale banks in India and Thailand.

    In addition, Techcombank successfully mobilised capital to raise its capital adequacy ratio (CAR) to 14.3 per cent, much higher than the level stipulated by the State Bank of Vietnam as well as the minimum level according to Basel II.

    Techcombank was among the few commercial banks last year which were assigned higher credit growth limits of 18 per cent with priority given to those who met Basel II’s capital safety and risk management standards ahead of schedule.

    “The bank plans to grow revenue by 20-30 per cent a year and retain 20 per cent of profit. In order to increase revenue, instead of growing debt balance, the bank would focus on raising fees (expected to account for 50 per cent of the total revenue),” Anh said.

    He added that Techcombank always focused on controlling credit growth from the central bank to ensure sustainable growth of the economy.

    Anh said Techcombank was among the banks to have successfully resolved bad debt. All of its debts were sold to VAMC and totally resolved two years ago. It had also well controlled credit quality by its strict risk warning and management system.

    With its profits listed in the top three banks in the country’s banking system in 2018, Techcombank’s shareholders agreed to continue to retain earnings to invest in creating growth momentum in the future.
    Hồ Hùng Anh, the bank’s chairman, said the bank wanted to retain profit to strengthen its equity and ensure the requirements of the central bank and Basel II are met.

    At the meeting, shareholders also approved a plan to issue 10 million shares under the Employee Stock Ownership Plan (ESOP) programme at a price of VNĐ10,000 to increase its charter capital to more than VNĐ35 trillion.
    The bank said it would focus on growth contributed by service fees thank to implementing a modern banking transaction system for corporate customers and improving their experiences through online payments and life insurance products.

    In addition, it would develop new solutions in house lending, car lending, credit and payments to meet increasing demands of customers.

    Anh added the bank would start construction of two new buildings on Lý Thường Kiệt Street (Hà Nội) and Lê Duẩn (HCM City) this year. The two buildings are expected to become operational in 2021.

    Hồ Hùng Anh was re-elected to the position of chairman of Techcombank’s board of directors for the third consecutive term.

    Other members include Nguyễn Đăng Quang, Nguyễn Thiều Quang Nguyễn Cảnh Sơn, Đỗ Tuấn Anh, Lee Boon Huat, Saurabh Narayan Agarwal and Nguyễn Nhân Nghĩa.

    The new management board would continue to implement its customer-centric strategy, invest in technology to develop a digital foundation and big data while improving risk management to reach high ratings with prestigious ratings organisations.

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  • Credit growth limited at 15% for best banks in 2019

    Credit growth limited at 15% for best banks in 2019

    HÀ NỘI The State Bank of Vietnam (SBV) has assigned a credit growth limit to each commercial bank in 2019, with priority given to those who met Basel II’s capital safety and risk management standards ahead of schedule.

    According to the current regulation, the SBV sets a credit growth limit for the entire year for each bank – depending on its health – to ensure the credit growth target of the entire banking system during the year (14 per cent for 2019).

    This year, the highest credit growth limit of 15 per cent was assigned to the group of banks which met the Basel II’s standards earlier than the SBV’s deadline of 2020. The remaining banks, meanwhile, were allocated a lower rate of below 12 per cent.

    Last year, most banks were assigned higher credit growth limits, ranging from 14 per cent to 16 per cent.

    The credit growth target of the entire banking system and of each bank has tended to slow in the past two years. Experts attributed the slowdown to the SBV’s policy changes. Previously, due to the underdevelopment of the local stock market, banks, which should act only as intermediaries in the monetary market, had to function to fund medium- and long-term capital for the economy.

    However, the SBV has tried to gradually change the role of banks so as to make them fund only short-term capital for the economy through the provision of working capital loans for businesses and households.

    To make the change, the SBV required banks to lower the ratio of short-term funds for medium and long-term loans from 45 per cent in 2018 to 40 per cent since early this year.

    Experts have also agreed with the credit growth slowdown, saying it was necessary to improve banks’ credit quality and risk management.

    Nguyễn Xuân Thành from Fulbright University Vietnam said currently, the pressure on credit growth to support economic growth was not so high, so the allocation of a credit limit to each bank depending on its health was reasonable. Accordingly, banks should only boost credit in case of good control of risks, in order to ensure sustainable growth.

    To offset the revenue reduction from lending activities, banks said they plan to increase profits through cutting operating costs and promoting digital services.

    Đỗ Minh Phú, chairman of TPBank, said digital banking would play a major role in reducing operating costs and increasing the cost-to-income ratio (CIR) efficiency, contributing to improving the bank’s profits this year.

    Phú said the biggest costs in banking operations were the costs of network investment and development, along with the costs for personnel, which could be solved by the application of digital banking. Attracting customers to non-credit services and service fee collection was also becoming a trend.

    Sharing the same view, Nghiêm Xuân Thành, chairman of Vietcombank, said that 2019 would be the year of digital banking for Vietcombank. In the past three years, the bank had focused on investment and implementation of a new core banking system to boost service development and shift the revenue structure instead of relying heavily on credit.

    Developing digital banking combined with retail banking in a potential market of 95 million with a high percentage of young people means commercial banks were quickly accumulating a customer base and large payment needs, Thành said.

    The focus on digital banking combined with retail banking has also helped some banks, like Vietcombank, Techcombank and HDBank, increase their number of individual customers rapidly in recent years, which has also contributed to raising the banks’ current account savings accounts (CASA) significantly.

    Reports showed some banks last year raised CASA to 28-30 per cent in the total structure of deposits. The large proportion of low-interest rate deposits has helped banks reduce mobilisation and operating costs, increasing profits and improving marginal interest in lending.