Vietnam Technological & Commercial Joint Stock Bank · HOSE:TCB
Vietnam Technological & Commercial Joint Stock Bank — Techcombank — CLSA Investor Conference Hong Kong 2023
36 slides from Vietnam Technological & Commercial Joint Stock Bank's conference presentation, September 2023
Slide 1: Techcombank No. 1 Vietnam Bank in the Digital Era
Techcombank No. 1 Vietnam Bank in the Digital Era Corporate Presentation Hongkong, September 2023
Slide 2: Agenda
Agenda SECTION Vietnam Macro & Banking sector SECTION Building the Foundation - 01 02 Techcombank Pillars of strength SECTION New Growth Opportunities SECTION Q&A 03 04
Slide 3: Vietnam Macro & Banking sector
SECTION Vietnam Macro & Banking sector 01
Slide 4: Vietnam is one of the world's fastest-growing economies
Vietnam is one of the world’s fastest-growing economies… Highest expected GDP growth GDP expected to exceed GDP per capita expected to amongst emerging markets Singapore’s by 2026 exceed today-China by 2034 2023 – 2028 Annualized GDP Growth GDP GDP per Capita Forecast USD bn USD ’000 6.7% 800 15 6.2
Slide 5: Driven by manufacturing, consumption and growing affluence
… driven by manu facturing, consumption and growing affluence Vibrant manufacturing sector High consumption-based Growing affluence and strong FDI inflows economy Industrial Output (USD bn) Consumption as a % of GDP, 2021 Middle & Affluent class1 as a % of total FDI Investment (USD bn) population, %
Slide 6: Young, digital savvy and increasingly urbanized population
… young, digital savvy and increasingly urbanized population Young population Increasing smartphone penetration Median age of population (2023) % 45 49 59 61 43 52 55 39 40 48 33 44 2017 2018 2019 2020 2021 2022 VN CN TH SG KR JP Rising urbanization rate Fastest growing banking daily active users (D
Slide 7: Stable financial system and pro-growth policies
..stable financial system and pro-growth policies Stable inflation Resilient currency Eop 2022 vs 2021 CPI growth (YoY) Currencies vs USD (+ Appreciation) 2023 YTD change % 4.9% ID VN SG TL PH MY 2.8% 3.0% 1.7 0.7 Jan-23 Apr-23 Aug-23 -0.8 -1.2 -1.8 -1.8 -3.3 -4.0 -4.6 -5.4 -8.5 -8.4 Low banking sys
Slide 8: Being poised for growth given low product penetration
Being poised for growth given low product penetration Vietnam is at an inflection point & poised for growth Low product penetration 51% Bond1 36% 24% (Outstanding 15% balance/GDP) 3% Singapore 44% 49% Mortgage2 PFA5 per capita 31% (Outstanding 16% balance/GDP) 3% 9% Insurance3 5% 5% Hanoi-HCMC (2030
Slide 9: Banking sector growth projected at 17% p.a., fastest in South-east Asia
Banking sector growth projected at 17% p.a., fastest in South-east Asia Vietnam total banking post-risk revenue Growth in post-risk revenues in South-east Asia VND Tn CAGR 21-25 611 VN 17% +17% SG 9% 326 ID 10% MY 9% TH 7% 2021 2025 Sources: McKinsey Global Banking Pool 9
Slide 10: Big opportunity themes in Vietnam Banking
5 big opportunity themes in Vietnam Banking Secured1 Unsecured2 2025 Vietnam banking post-risk revenue, % of total post-risk revenue Credit Deposits Fee business Total 1 Affluent 4% 16% 5% 26% 1 Affluent banking will represent 1% 46% of the consumer banking opportunity in 2025 Retail Mass 2 3% 6% 7%
Slide 11: Digital capabilities will be crucial to win
..and digital capabilities will be crucial to win Top 4 globally % of adult population with digital-only bank account, 2021 32% 25% 25% 23% Unbanked Internet Digital bank 11% 11% 11% 9% 6% population Penetration “right to win” Vietnam Brazil Mexico Ireland Finland Canada USA Denmark Indonesia ID 51%
Slide 12: Building the Foundation - Techcombank Pillars of strength
SECTION Building the Foundation - 02 Techcombank Pillars of strength
Slide 13: Techcombank at a Glance
Techcombank at a Glance O N E O F T H E L A R G E S T, FA S T E S T G R O W I N G A N D M O S T P R O F I TA B L E B A N K S I N V I E T N A M #1 35% 45% 3.3% 15% LARGEST PRIVATE BANK BY PBT 1 2016-2022 PBT CAGR CASA 2 (#1 IN VIETNAM ) ROA 2 (#1 IN VIETNAM ) CAR 1 (#1 IN VIETNAM ) OFFERING A WIDE RA
Slide 14: Differentiated and market-leading operating metrics relative to sector peers
Differentiated and market-leading operating metrics relative to sector peers CASA CIR 45% 41% 32% 15% TCB1 Industry Median2 TCB1 Industry Median2 Cost of Fund SM + NPL ratio 5% 3% 3% 2% TCB1 Industry Median2 TCB1 Industry Median2 NIM LTM Coverage ratio 5% 153% 3% 75% TCB1 Industry Median2 TCB1 Indus
Slide 15: Leading PBT growth and ROAA in Asian banks
Leading PBT growth and ROAA in Asian banks 2016-22 PBT CAGR TCB Vietnamese banks Top regional banks (SEA & India) 35% 34% 28% 27% 19% 16% 16% 16% 12% 9% 9% 8% 8% 6% 4% 3% (1%) (3%) TCB MBB VPB VCB BID CTG Kotak HDFC BDO BCA BRI BPI CIMB BNI Maybank Public Kbank SCB FY2022 ROAA 3.2% 3.2% 2.9% 2.9% 2.
Slide 16: Strategic focus on blue-chip corporates and high-quality affluent segment
Strategic focus on blue-chip corporates and high-quality affluent segment TCB CORE PRINCIPLES Focus on the largest Business (WB+BB) Retail economic opportunities Customers Customers Be the market leader in our core segments 2025 BANKING 2025 BANKING PROFIT POOL PROFIT POOL Holistic growth Advisory-l
Slide 17: Low risk-high return business model - 5 key pillars of strength
“Low risk-high return” business model - 5 key pillars of strength LOW RISK – HIGH RETURN 1 2 3 4 5 LEADING LEADING #1 AFFLUENT ROBUST FEE #1 ReCOM1 CORPORATE & WEALTH INCOME CASA & FRANCHISE BANKING2 MANAGEMENT GENERATION TXN. BANKING Leading VND 62Tn Largest VND 9.3Tn 45% CASA ReCOM value chain Cum
Slide 18: Secular trends continue to underpin Vietnam real estate market
Pillar 1: #1 ReCOM1 Franchise Secular trends continue to underpin Vietnam real estate market 1 #1 ReCOM FRANCHISE 2 3 4 5 and significant opportunity for TCB 6 7 Low mortgage penetration Low rates of urban home Rapid expansion of VN mortgage market ownership % GDP, 2022 As of 2021 Mortgage Industry
Slide 19: Market leader in high-end real estate through a unique value-chain approach
Pillar 1: #1 ReCOM1 Franchise Market leader in high-end real estate through a unique value-chain approach 1 #1 ReCOM FRANCHISE 2 3 4 5 6 7 Differentiated Approach to Real Estate Best-in-class ReCOM franchise Mortgage 40% >50% Financing (partnership Mortgage Units of Top (loans / bonds) with develope
Slide 20: Focus on consumption economy which represents 63% of GDP
Pillar 2: Leading Corporate Banking Franchise Focus on consumption economy which represents 63% of GDP 1 2 LEADING CORPORATE BANKING 3 4 5 6 7 Focusing on sectors with high Leading full-service provider of Delivering robust growth at very low risk GDP contribution corporate banking services +2.5x No
Slide 21: Leading affluent business with #1 wealth management franchise
Pillar 3: Affluent Banking and Wealth Management Leading affluent business with #1 wealth management franchise 1 2 3 #1 AFFLUENT & WEALTH MANAGEMENT 4 5 6 7 Unique value proposition for Affluent customers Pioneer and Market Leader in Wealth Management Bespoke insights and advisory 50%+ Dedicated wea
Slide 22: Market leader in NFI generation and highest NFI/TOI ratio in the industry
Pillar 4: Robust Fee Income-Driven Business Model Market leader in NFI generation and highest NFI/TOI ratio in the industry 1 2 3 4 5 ROBUST FEE INCOME GENERATION 6 7 Largest market share of Market leading NFI/TOI Steady and sustained growth in NFI while diversifying fee income across multiple sourc
Slide 23: Highest CASA ratio in the industry
Pillar 5: Leading CASA and Transaction Banking Franchise Highest CASA ratio in the industry… 1 6 2 3 4 5 LEADING CASA & TXN BANKING 7 Pioneer of zero fee model leading to CASA growth Market-leading digital banking experience CASA Balance # of E-Banking Customers (VND Tn) (Mn) +23% 132 +4.2x CAGR App
Slide 24: Strong market share in credit cards and transaction banking
Pillar 5: Leading CASA and Transaction Banking Franchise ..with strong market share in credit cards and transaction banking 1 2 3 4 5 LEADING CASA & TXN BANKING 6 7 Top Card Franchise in Vietnam Best-in-class Transaction Banking #1 Market share in card purchase volume 13% Market Share in Transaction
Slide 25: Digital to the core - with capabilities 3+ years ahead of local banks
Pillar 6: Best-in-Country Digital Banking Capability Digital to the core – with capabilities 3+ years ahead of local banks 1 2 3 4 5 6 BEST-IN-COUNTRY DIGITAL BANKING CAPABILITY 7 Unmatched digital capabilities in VN with Best-in-class customer experience & most platforms on cloud external recogniti
Slide 26: Built up top tier talent to drive the transformation
Pillar 6: Best-in-Country Digital Banking Capability Built up top tier talent to drive the transformation High work force engagement… Hired professionals 19 nationalities 84 Employee engagement 1 from leading regional Top 6% in SEA organizations and global companies 1500+ Years of experience added a
Slide 27: New Growth Opportunities
SECTION New Growth Opportunities 03
Slide 28: Leverage core strengths and digital & data capabilities to expand TOI opportunity
Leverage our core areas of strengths and new digital & data capabilities to expand TOI opportunity Business (WB+BB) Retail customers customers LARGE CORPORATE & AFFLUENT Large Corp. Affluent RETAIL EXPANSION SME EXPANSION MM & USME Mass Affluent SME & MSME Mass 28
Slide 29: Leverage the bank's synergies to expand into SME
Leverage the bank's synergies to expand into SME Business customers Deliver integrated CVPs for Large Corp. Entrepreneurs to cross sell into Affluent customers SME EXPANSION MM & USME Tap into the value chain of large corporates SME & MSME Differentiated value propositions Higher omnibus Integrated
Slide 30: Retail expansion: Mass Affluent and Emerging Mass Affluent
Leverage large corporate ecosystems and digital capabilities to expand into Mass Affluent and Emerging Mass Affluent Retail customers Leverage Large corporates ecosystem to grow New to Bank customers at Affluent lower cost with distinctive CVPs RETAIL EXPANSION Mass Affluent Enhance digital capabili
Slide 31: Increase customer upward migration through branded tier strategy
Increase customer upward migration and engagement through differentiating branded tier strategy TOI/ customer/ year 2022 Value beyond generations ~200x Branded tiers to create distinctive customer Affluent What’s your next? value proposition Mass Affluent 25x Live life richly Leverage technology Eme
Slide 32: Achieve our aspiration by 2025
Achieve our aspiration by 2025 STRATEGY 2021-2025 CASA ratio of 4 1 ~55% $20 billion 2025 market capitalization performance aspiration 3 2 NFI/TOI ratio Target ROE of ~30% ~20% 32
Slide 33: Glossary
Glossary Acronym Definition Acronym Definition Acronym Definition AFF Affluent customers GDP Gross Domestic Product RaR Risk-adjusted return AUM Asset Under Management GWP Gross Written Premium RBG Retail Banking Group Joint Stock Commercial Real Estate, Construction BB Business Banking JSB ReCoM Ba
Slide 34: Q&A
BE GREATER TECHCOMBANK <> SECTION Q&A 04
Slide 35: Thank you!
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Slide 36: Disclaimer
> DISCLAIMER > The information in this presentation is being provided as a historical, reference source only and is not being used for, and nothing in this presentation constitutes an offer, invitation or recommendation to sell or issue, or any solicitation of any offer to purchase or subscribe for,
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