MB eyes 30 million customers by 2024 following strong Q3 earnings

October 31, 2023 | 18:12
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Military Commercial Joint Stock Bank (MB) has just unveiled a robust performance for Q3 2023, maintaining a positive growth trajectory. The bank's focus on operational cost management and a push towards digital transformation places it at the forefront of Vietnam's banking sector's digitalisation race.
MB eyes 30 million customers by 2024 following strong Q3 earnings

Embracing digital expansion

As it approaches its 30th anniversary in 2024, MB has set an ambitious target to attract 30 million customers, building on a strong base of nearly four million new clients added in the first nine months of 2023. This growth strategy aligns with MB's broader vision to transcend traditional banking.

"At MB, our vision extends beyond the conventional scope of banking. We are strategically pivoting towards becoming a comprehensive digital conglomerate," said Luu Trung Thai, chairman of MB’s Board of Directors, during a keynote address at a recent Forbes forum.

MB's dedication to technological advancement and unique digital propositions is clearly reflected in its bifurcated digital ecosystem. The MBBank App is tailored for individual users, while BIZ MBBank is designed to meet the needs of the business clientele.

As of September 2023, MB's digital platforms facilitated an impressive 1.5 billion transactions. Notably, digital channels accounted for 96 per cent of these transactions, a rate comparable to the leading financial institutions across Asia. The bank's digital offerings, especially its applications, have seen a remarkable uptake, boasting over 10 million active users in Vietnam alone.

"Our ability to integrate over 200 distinct services via our innovative mini-app model underlines our commitment to providing efficient, user-centric services to our customer base of 25 million," Thai said.

Early October 2023 marked another milestone with MB being honoured as the "Corporate Excellence Award" for the fourth consecutive year at the Asia Pacific Enterprise Awards 2023. Additionally, four of its solutions garnered the "Vietnam Digital Transformation 2023" award, underscoring their user-centric, high-tech design and customer experience focus.

Dividend payout and capital increase

In a move that meticulously balances the priorities of the bank, its customers, shareholders, and broader investor community, MB has recently executed a dividend distribution of 20 per cent. This payout was split into a 5 per cent cash dividend and a 15 per cent stock dividend, aligning meticulously with the resolutions passed by shareholders.

MB targets digital supremacy, eyes 30 million customers by 2024 following strong Q3 earnings

Simultaneously, the bank is diligently progressing with a substantial capital enhancement plan. From a base of VND45.34 trillion ($1.91 billion) as of December 31, 2022, the bank's capital is projected to increase to around $2.2 billion. This strategic infusion of additional funds is earmarked primarily for augmenting infrastructure and technology investments.

Notably, this includes the development of a new headquarters in Ho Chi Minh City and expansions in other key strategic locations, underscoring MB's commitment to growth and innovation.

Sustained growth amidst economic challenges

MB's consolidated pre-tax profit topped $843.88 million in the first three quarters of 2023, a 10 per cent increase on-year.

The bank itself reported a profit of $795.77 million, up by 15 per cent from the third quarter of the previous year. This performance is indicative of the bank's stable growth, outpacing the industry average.

The bank has also experienced a healthy credit growth with total outstanding loans reaching approximately $24.35 billion), a near 14 per cent increase from 2022.

Customer deposits grew by 8.1 per cent to around$20.24 billion.

Despite a slight decrease in net interest margin (NIM) of 0.08 per cent compared to 2022, MB representatives attributed this to reduced lending rates aimed at supporting businesses in a tough economic climate, in line with government and central bank policies.

Facing numerous economic challenges, MB has prioritised ensuring safety indicators, operational efficiency, and cost management.

A pivotal aspect of these initiatives is the bank's digital transformation, which has notably diminished operational expenses while elevating risk management standards, aligning with global Environmental, Social, and Corporate Governance criteria.

These concerted efforts have positively impacted the group's financial efficiency, demonstrated by a substantial reduction in the cost-income ratio to 28.5 per cent.

As MB looks to the future, Thai reaffirms the bank's unwavering dedication to digital advancement.

"Over the next four years, we expect our digital platforms to generate approximately half of our total revenue," Thai said.

This strategic direction is crucial to MB's aspiration of emerging as a pre-eminent digital enterprise and financial conglomerate, consistent with its strategic objectives set for 2022-2026.

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