33 slides from Vietnam Technological & Commercial Joint Stock Bank's earnings presentation, Jul 22, 2022
Slide 1: Techcombank 1H22 Analyst Presentation
TECHCOMBANK 1H22 ANALYST PRESENTATION 2 2 J U LY 2 0 2 2 1
Slide 2: Content
SECTION 1 CONTENT HIGHLIGHTS SECTION 2 E C O N O M I C U P D AT E SECTION 3 R E V I E W O F 1 H 2 2 F I N A N C I A L R E S U LT S SECTION 4 FY22 OUTLOOK 2
Slide 3: Highlights
TECHCOMBANK <> SECTION 1 HIGHLIGHTS
Slide 4: Resilience amidst elevated uncertainties and changes in operating environment
Resilience amidst elevated uncertainties and changes in operating environment VND 21.1 Tn 6M22: TOI growth of +16.6% YoY was driven by both NII (+25.1% YoY) and NFI1 (+29.5% YoY) TOI 16.6% YoY Excluding recoveries TOI grew +16.5% YoY VND 14.1 Tn PBT Growth in pre-tax profit was supported by sharp re
Slide 5: Economic Update
TECHCOMBANK <> SECTION 2 ECONOMIC UPDATE
Slide 6: Strong GDP growth of 7.7% in 2Q22 with headline CPI under control
Strong GDP growth of 7.7% in 2Q22 with headline CPI under control Indicators 2017 2018 2019 2020 2021 2Q22 GDP growth (%) 6.8 7.1 7.0 2.9 2.6 7.7 Inflation (avg., %) 3.5 3.5 2.8 3.2 1.8 3.0 Retail sales growth1 9.5 8.4 9.2 -3.0 -6.2 7.9 (real terms,%) FDI disbursement (% of GDP) 6.2 6.2 6.2 5.8 5.4
Slide 7: Review of 1H22 Financial Results
SECTION 3 REVIEW OF 1H22 FINANCIAL RESULTS 7
Slide 8: Financial Highlights
Financial Highlights 2Q21 2Q22 6M21 6M22 6M21 6M22 1 TOI growth (YoY) 57.0% 17.6% 49.4% 16.5% Credit growth 11.2% 8.5% NII growth (YoY) 67.3% 18.3% 56.0% 25.1% (YTD)3 NFI growth (YoY)2 36.0% 34.3% 40.1% 29.5% NIM (LTM) 5.6% 5.6% Loans & P&L NFI2/TOI1 20.2% 23.1% 19.6% 21.8% Asset Quality NPL 0.4% 0.
Slide 9: Strong performance from core revenue engines
Strong performance from core revenue engines NII increased 25.1% YoY in 6M22, driven by the expansion of interest earning assets and resilient NIM NFI1 was up 29.5% YoY in 6M22, with strong growth from Letters of credit (LC), Cash & Settlement (+79.9% YoY), Cards (+45.3% YoY), Banca (+31.5% YoY)
Slide 10: NII benefited from stable NIM and growing credit balances
NII benefited from stable NIM and growing credit balances Distribution of corporate bonds in the Bank's portfolio freed up capacity to support customers on their borrowing needs Optimisation of funding structure helped maintain cost advantage, mitigating interest rate increases and sustaining NI
Slide 11: Increased diversification of credit mix
Increased diversification of credit mix Retail book expanded 19.7% QoQ, driven by high customer demand for consumption and investment Shift toward Retail and SME segments is in line with the Bank’s strategy and results in a more balanced risk profile Credit mix (VND Tn) Loan mix by term (VND Tn)
Slide 12: Mortgage demand continued to be robust, reflecting high housing needs
Mortgage demand continued to be robust, reflecting high housing needs Corporate loans to FMCG, retail, logistics and utilities expanded YoY, as efforts to diversify sources of income continued Growth of retail loans driven by strong origination activity on mortgages (up 25.1% QoQ) and credit car
Slide 13: Funding costs remained low, driven by retail CASA
Funding costs remained low, driven by retail CASA Limited increase in deposit rates (+5bps), thanks to the Bank’s high CASA ratio and strong customer franchise CASA balance decreased 7.9% QoQ driven by the customers’ appetite for consumption and investments as economy recovers from COVID, impact
Slide 14: Strong NFI growth of 29% YoY, showing strength of diversified business-model
Strong NFI1 growth of 29% YoY, showing strength of diversified business-model Strong growth in fees from LC, cash & settlements fees (+79.9% YoY in 6M22), FX (+64.2% YoY in 6M22) and cards (+45.3% YoY in 6M22) reflected launch of innovative and value-added propositions and offers Bancassurance r
Slide 15: The bank continued the execution of its investment in IT, Digital and Data
The bank continued the execution of its investment in IT, Digital and Data Strong revenue momentum helped maintain CIR around 30.3%, despite the intensity of the Bank’s investment effort Increase in Other expenses was driven by investments in tech infrastructure maintenance costs, consulting fee
Slide 16: Asset quality metrics remained healthy
Asset quality metrics remained healthy ▪ Credit cost (LTM) dropped to 0.4% (from 0.6% for LTM ending 1Q22) ▪ Non-performing loan ratio decreased slightly vs. 1Q22, to 0.6% Provision expenses and LTM credit costs (VND Tn) NPL and coverage ratio (VND Tn) 0.9% 259% Credit cost 0.7% 0.7% 0.6% 184% 163%
Slide 17: Rescheduled loans balance continued to decline as economy recovers
Rescheduled loans balance continued to decline as economy recovers Rescheduled loans further declined to VND0.5 Tn, equivalent to only 0.1% of outstanding balances, as more customers paid down previously rescheduled loans or exited the COVID-support program as their finances recovered No impacts
Slide 18: Capital and liquidity positions remained robust
Capital and liquidity positions remained robust CAR improved to 15.7%, from 15.1% at the end of 1Q22, as the credit book was shifted toward retail customers with lower risk weights Diversification of funding mix helped sustain low CoF while maintaining liquidity ratios well within regulatory lim
Slide 19: Differentiated operating metrics relative to sector peers
Differentiated operating metrics relative to sector peers TCB Industry median1 CASA CIR2 49.0% 50.5% 50.4% 47.5% 41.4% 46.1% 46.1% 39.6% 38.6% 44.2% 38.6% 39.4% 34.4% 36.3% 35.0% 35.0% 34.8% 35.0% 17.0% 16.9% 18.5% 19.1% 18.4% 18.7% 17.7% 30.7% 13.0% 14.5% 34.0% 28.1% 29.9% 33.4% 29.9% 30.3% 28.7% 3
Slide 20: FY22 Outlook
TECHCOMBANK <> SECTION 4 FY22 OUTLOOK 20
Slide 21: Vietnam's 2022 GDP growth expected in the 6.5% - 7.0% range
Vietnam’s 2022 GDP growth expected in the 6.5% - 7.0% range 2022 Real GDP growth Techcombank forecasts FY22 GDP to be in Real GDP Vietnam & World GDP forecasts for Vietnam the 6.5 - 7.0% range: Real GDP growth indexed to 100% in 2019 Percent; 2022 • Manageable CPI of ~3.5% p.a. reduces pressure on
Slide 22: Liquidity becomes tighter, pointing to continued pressure on interest rates
Liquidity becomes tighter, pointing to continued pressure on interest rates Deposit & Credit growth SBV Balance 5-yr and 10-yr VGB YoY Deposit growth Credit growth VND Tn State Treasury and OMO needed %, First working-day of month Required reserve 15.8% 600 6.0 13.7% 14.5% 13.6% 13.2% 2022 ST on ave
Slide 23: FY22 Outlook
FY22 Outlook FY20 FY21 FY22 6M22 Actual Actual Outlook Actual Credit growth1 23.3% 22.1% Per SBV quota 8.5% Cost of funds (%) 3.4% 2.2% 2.2% CASA ratio 46.1% 50.5% 47.5% NIM 4.9% 5.6% 5.6% NII growth (YoY) 31.5% 42.4% 25.1% NFI growth (YoY)2 31.5% 42.4% 29.5% CIR ratio 32.8% 30.1% 30.3% NPL ratio 0.
Slide 24: Appendix
TECHCOMBANK <> > APPENDIX 25
Slide 25: 2Q22 Financial Highlights (1/3)
2Q22 Financial Highlights (1/3) 6M22 vs. 2Q22 vs. 2Q22 vs. Balance sheet (VND Bn) 2Q21 3Q21 4Q21 1Q22 2Q22 6M21 6M22 6M21 1Q22 2Q21 Total assets 504,304 541,635 568,729 615,270 623,745 504,304 623,745 23.7% 1.4% 23.7% Deposits from customers 289,335 316,376 314,753 328,914 321,634 289,335 321,634 11
Slide 26: 2Q22 Financial Highlights (2/3)
2Q22 Financial Highlights (2/3) 6M22 vs. 2Q22 vs. 2Q22 vs. Segmentation - Balance sheet (VND Bn) 2Q21 3Q21 4Q21 1Q22 2Q22 6M21 6M22 6M21 1Q22 2Q21 Loans to customers 313,514 321,042 347,341 365,743 391,824 313,514 391,824 25.0% 7.1% 25.0% Retail 128,874 137,952 161,657 171,623 205,381 128,874 205,38
Slide 27: 2Q22 Financial Highlights (3/3)
2Q22 Financial Highlights (3/3) Segmentation – NFI breakdown 6M22 vs. 2Q22 vs. 2Q22 vs. 2Q21 3Q21 4Q21 1Q22 2Q22 6M21 6M22 (VND Bn) 6M21 1Q22 2Q21 IB fees 911 931 983 1,054 703 1,690 1,757 4.0% -33.3% -22.8% Bond underwriting 237 282 159 424 152 420 576 37.2% -64.2% -36.0% Bond distribution 224 169
Slide 28: Digital platform continued to be dominating channel
Digital platform continued to be dominating channel Share of e-banking transaction edged up further to 85.8% in 6M22 (from 82.2% in 6M21) thanks to superior technology infrastructure Number of Retail E-banking customers1 (Mn, EoP) Share of retail transactions by channel Retail term deposits by cha
Slide 29: Financial metrics formula
Financial metrics formula Indicator Formula Note NPL coverage ratio 𝑃𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛 𝑟𝑒𝑠𝑒𝑟𝑣𝑒𝑠 𝑓𝑜𝑟 𝑙𝑜𝑎𝑛𝑠 𝑡𝑜 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑁𝑃𝐿 𝑏𝑎𝑙𝑎𝑛𝑐𝑒 CASA ratio 𝐷𝑒𝑚𝑎𝑛𝑑 𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑠 + 𝑀𝑎𝑟𝑔𝑖𝑛 𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑠 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑠 𝑓𝑟𝑜𝑚 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠…
Slide 30: Financial metrics formula
Financial metrics formula Indicator Formula Note Asset yield 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 ∗ 4 Interest earning assets comprise: Balance with SBV, Balance at credit 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑎𝑖𝑙𝑦 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑎𝑟𝑛𝑖𝑛𝑔 𝑎𝑠𝑠𝑒𝑡𝑠 institutions, loans to customers…
Slide 31: Glossary
Glossary AUM : Assets under management PAT : Profit after tax CAGR : Compounded Annual Growth Rate PBT : Profit before tax CAR : Capital Adequacy Ratio PMI : Purchasing Managers' Index CASA : Current Accounts and Saving Accounts PPOP : Pre-provision operating profit CIs : Credit institutions QoQ : Q
Slide 32: 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, sec
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