VIB targets steady growth with core business targets in 2020

VIB set core business targets with steady growth in 2020

Pre-tax profit to reach $195.65 million, total assets up 20 per cent

The Board of Directors (BoD) will be submitting its 2020 business plan to the AGM. Accordingly, the bank’s total assets is expected to surpass VND220 trillion ($9.57 billion), up 20 per cent compared to 2019.

Its outstanding loan balance is expected to jump 24 per cent (depending on the approval of the central bank [SBV]). Deposits, including deposits from customers and valued papers issued, will also be up 19 per cent. Under the impact of COVID-19 on business performance, the bank expects profit of at least VND4.5 trillion ($195.65 million). Return on equity ratio (ROE) is 26 per cent.

Listing plans on Ho Chi Minh City Stock Exchange (HSX)

A point worth noting in the AGM document is that VIB plans to list on the HSX this year to bolster exposure among investors, which is good news for investors in 2020. Albeit being one of the most sought-after bank stocks, VIB tickers have not yet made it into the investment portfolios of major institutional investors and investment funds due to it being on the Unlisted Public Company Market (UpCOM). The BoD is authorised to decide the listing time after finalising its charter capital hike by bonus shares.

20 per cent increase to charter capital by bonus shares

The BoD will also propose the AGM a 20 per cent charter capital increase by bonus shares in parallel to its 2019 profit distribution plan.

Last year, VIB achieved a pre-tax profit of VND4.082 trillion ($177.48 million), with 27 per cent ROE. Total assets reached VND185 trillion ($8 billion), up 33 per cent on-year.

Total outstanding loan balance jumped 31 per cent to touch VND132 trillion ($5.74 billion). Deposits from customers and valuable papers amounted to VND140 trillion ($6.1 billion), up 47 per cent. With this business result, the BoD proposes the AGM to approve a 20 per cent bonus share allocation, using 2019 profit and funds.

Top-quality retail bank

In the past three years, VIB has become a retail bank with a growth rate at the top of the banking industry with good asset quality. The proportion of retail banking outstanding balance to total outstanding loan balance increased from 30 to 82 per cent. Auto loan, mortgage, bancassurance and credit card (key products of VIB) are all leading in growth rate.

VIB has held the No.1 position in the auto loan market for many years. 2019 was also a remarkable year of VIB, with the bank growing from the third to the top position in bancassurance business in Vietnam.

Credit cards with outstanding features for the first time in Vietnam have also marked record card growth and card spending. VIB was recognised as the first bank to successfully apply virtual card technology, big data, and AI allowing customers to own credit cards in just a few hours, manage smart cards with the MyVIB mobile application without support from call center or branch.

MyVIB has been rated by The Asset magazine as Digital Bank of the Year and Best Retail Digital Banking Experience in Vietnam for the fourth consecutive year.

The bank’s asset quality is strictly managed, with a non-performing loan ratio (NPL) of only 1.7 per cent and no VAMC debt. Capital adequacy ratio (CAR) according to Basel II standard reached 9.8 per cent as of May 31, 2020.

Th consumer loan portfolio is mostly secured by propertis. VIB is also well-known as a bank with an excellent operating model, quality, and high efficiency by customers and partners. With the sustainable development of quality and scale, VIB has experienced an average growth rate of 80 per cent in the three years 2017-2019 with ROE of 27 per cent in 2019.