20:46 (GMT +7) - Monday 21/10/2019

Banking & Finance

Techcombank reports strong first half

Released at: 09:46, 29/07/2019 BUSINESS SPOTLIGHT

Techcombank reports strong first half

Photo: Techcombank

Bank posts record profit before tax in first half and grows revenue for 15th quarter in succession.

by Doanh Doanh

Techcombank (TCB) further cemented its position as a leading bank in Vietnam in reporting profit before tax (PBT) of VND5.7 trillion and revenue of VND9.1 trillion for the first half of 2019, 32 per cent and 19 per cent increases against the same period last year.

Financial highlights

Net interest income reached VND6.5 trillion in the first half, up 28 per cent year-on-year. Net fee income was up 19 per cent, underpinned by robust growth in bancassurance and bond advisory, which grew 34 per cent and 82 per cent year-on-year. A 77 per cent decrease in provision expenses combined with a cost-to-income ratio of 35 per cent helped contribute to record first half results and a return on assets of 2.7 per cent.

Total assets grew 12 per cent during the first half to reach VND360.7 trillion, with credit growth expanding 12 per cent. Customer deposits increased 9.4 per cent and CASA as a percentage of total deposits stood at 30.4 per cent. This was the result of the bank’s consistent effort in increasing customer engagement via fast, convenient digital solutions. The Asian Banker recently named TCB as “Best Payments Bank” in Vietnam in recognition of its leadership in payment solutions in both retail and corporate banking.

Liquidity and credit quality healthy

Deposits rose to VND220.3 trillion, helping the bank maintain ample liquidity and translating into a loan-to-deposit ratio of 65.9 per cent, well below the State Bank of Vietnam (SBV)’s limit of 70 per cent. The short-term funds to medium-to-long-term loans ratio stood at just over 37.6 per cent, again below the SBV limit of 40 per cent.

At the end of the second quarter, the bank’s NPL ratio stood at 1.8 per cent, remaining within targets and reflecting an ongoing focus on prudent risk management and balanced growth.

Basel II implementation

The strong first-half financial results were achieved as the bank received approval from the SBV to implement Basel II capital standards. TCB’s CAR ratio of 15.6 per cent for the most recent quarter is nearly double the minimum requirement from the SBV on the CAR Basel II ratio, which is regulated at 8 per cent.

“Our recent business results track well against our five-year strategic plan,” said Mr. Quoc Anh Nguyen Le, CEO of Techcombank. “We continue to focus on our business strategy of putting our customers at the center of everything we do.”

In line with this strategy, Mr. Le added, the bank has made good progress in managing its balance sheet, diversifying its revenue streams, and building its capabilities in people, systems, and processes. “We are thrilled by the growth we see through our digital solutions and will continue to invest further as we help the Vietnamese people change the way they use money,” he said. “The recent approval from the SBV for the early adoption of Basel II reflects our proactive implementation of prudent risk and balance sheet management to support our long-term low risk, high return business model,” he said.

Techcombank was established in 1993 and is one of the largest joint stock banks in Vietnam and a leading bank in Asia. It pursues a proven customer-centric strategy in providing a broad range of banking solutions and services to more than 6 million retail, SME, and corporate customers in Vietnam through an extensive network of 313 branches throughout the country and via its market-leading internet and mobile banking services. The bank’s ecosystem approach within its chosen economic segments of housing, FMCG, auto, travel & leisure, financial services and utilities and telecom further differentiates TCB in one of the fastest growing economies in the world.

TCB is rated highest among banks in Vietnam, with a Ba3 from Moody’s and BB-2 from S&P, and was named “Best Bank in Vietnam 2018” by Euromoney. It is listed on the Ho Chi Minh Stock Exchange (HoSE) under the ticker TCB.

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