MB cements its position in Vietnam’s top banking group in terms of business performance in 2021

January 29, 2022 | 12:47
Forward-thinking Military Commercial Joint Stock Bank (MB) closed its fiscal year 2021 with a rosy profit outlook and explored fresh sources of growth despite the pandemic woes pressuring the industry.
MB cements its position in Vietnam’s top banking group in terms of business performance in 2021

MB has just revealed its whole year business performance. Accordingly, the renowned banking group successfully fulfilled its 2021 plan, with the total assets of the bank and its subsidiaries (MB Group) reaching $26.4 billion, up 22.7 per cent from the previous year. Profitability was $718.6 million on a consolidated basis.

With the impressive outcome, the bank enhances its ranking in Vietnam’s highest-quality, most efficient banking group. Its return-on-Asset ratio and return-on-equity ratios were 2.4 per cent and 23.49 per cent, respectively.

The combined non-performing loan (NPL) percentage of MB’s group remained minimal, at only 0.9 per cent, while the bank's NPL ratio was just 0.68 per cent. MB is classified among the two lenders with the highest NPL coverage ratio in the industry, with bad debt coverage reserve funds of the bank and MB’s consolidated group reaching around 400 per cent and 268 per cent.

Furthermore, its safety limitation is assured per the SBV’s legal framework, with a capital adequacy ratio of only 11 per cent.

In addition, current accounts saving accounts grew at a remarkable rate, rendering it the market leader with a growth rate of 41-49 per cent and a market value of nearly $8.3 billion. The cost-to-income rate fell by 5.7 per cent.

Additionally, MB group recorded a substantial expansion in 2021, with total revenues of six subsidiaries anticipated to be $792.2 million, representing a 48.8 per cent increase over the previous year and fulfilling the 104.3 per cent target. This is exemplified by the fact that MB Shinsei Finance Co., Ltd. (Mcredit) has ascended to third place in terms of market share after just five years in operation.

Last year, MB also extended its product offerings, engaged new customers, and attracted more deposits thanks to its prolific digital innovations.

The MBBank App garnered around 6.3 million new customers, bringing the total number of users to 9.5 million, equivalent to a 320 per cent gain on-year.

MB cements its position in Vietnam’s top banking group in terms of business performance in 2021

Currently, around 92 per cent of MB's transactions occur through digital channels. The percentage of digital transactions is one of the highest in Asia.

"We are continuously upgrading our comprehensive ecosystem to facilitate our customers with the best banking experience, even in remote areas," a representative of MB told VIR.

At the MB’s conference on January 7, Deputy Governor of the SBV Pham Tien Dung highlighted, "Just a few banks could embark on its digital transformation as swiftly and effectively as MB."

He also predicted that MB will be the one with the largest number of transactions in the country’s interbank 24/7 system.

"Fully automated credit profile evaluation on digital platforms, in particular, accounts for more than 30 per cent of total credit assessment at MB. For a Vietnamese lender, this is an astounding figure, thus highlighting MB’s digital-first approach,” Dung said.

Alongside fundamental indicators, vulnerable customers impeded by the pandemic have been a priority for MB.

In 2021, the bank lowered expenses and slashed more than $27.8 million in profits to provide extra support for the distressed with a range of solutions. Customers may benefit from credit assistance options such as rescheduling debt payments, maintaining debt groups, lowering loan interest rates, and service costs, among others.

The bank has loaned customers more than $15.1 billion, with the most preferential interest rates in the market.

By Hien Nguyen

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