35 slides from Vietnam Technological & Commercial Joint Stock Bank's earnings presentation, Apr 23, 2024
Slide 1: Techcombank 1Q24 Analyst Presentation
Techcombank 1Q24 Analyst Presentation Hanoi, Apr 23 2024
Slide 2: Highlights, Economic Update, Financial Results, FY24 Outlook
Section Section Section 01 Highlights 02 Economic Update 03 Financial Results Section 04 FY24 Outlook 2
Slide 3: Highlights
1Q24 Analyst Presentation Section 01 Highlights 3
Slide 4: Robust 1Q24 results with momentum extended from 2H23
Robust 1Q24 results with momentum extended from 2H23 Improved Declined 01 Highlights VND 12.3 Tn Steady acceleration of TOI momentum since 2H23 TOI Strong contribution from all drivers namely NII, NFI and other income 31.8% YoY VND 7.8 Tn Pre-provision profit expanded by 46%, supported by robu
Slide 5: Economic Update
1Q24 Analyst Presentation Section 02 Economic Update 5
Slide 6: Strong export recovery, FX pressure in line with global USD strengthening
02 Economic update Strong export recovery, FX pressure in line with global USD strengthening Better than last year Indicators 1Q23 2Q23 3Q23 4Q23 1Q24 2024F GDP growth 6.0 3.3 4.1 5.3 6.7 5.7 YoY, % Inflation 4.1 4.2 2.4 2.9 3.5 3.8 avg., % Retail sales growth1 10.3 8.4 7.3 7.1 5.1 real terms, % Dis
Slide 7: Stronger USD exerts pressure on FX rate; higher interbank rates
02 Economic update Stronger USD exerts pressure on FX rate; Higher interbank interest rates; Credit demand expected to improve Deposit & Credit growth: Banking system’s CASA ratio Weighted deposit interest rates of G18 YTD % % Deposit growth Credit growth 6M 12M 7.9 23 8 6.0 22 6.9 20.4 7 21 3.4 20
Slide 8: Financial Results
1Q24 Analyst Presentation Section 03 Financial Results 8
Slide 9: Financial highlights
Financial highlights 03 Financial results 1Q23 1Q24 1Q23 1Q24 TOI1 growth (YoY) -5.2% 32.0% Credit growth3 (YTD) 9.3% 6.4% NII growth (YoY) -19.5% 30.2% NIM (LTM) 4.6% 4.0% NFI2 growth (YoY) 14.2% 28.3% Loans & Asset NPL 0.87% 1.17% P&L NFI2/TOI1 23.7% 23.0% Quality NPL (bonds + loans) 0.80% 1.10% C
Slide 10: Upbeat performance backed by lower CoF
Upbeat performance backed by lower CoF 03 Financial results Strong growth in TOI, +32% YoY2 and PBT, +39% YoY in 1Q24 Robust NII performance was enabled by faster-than-market asset growth and lower cost of funds NFI maintained growth momentum, underpinned by commendable recovery in IB fees and
Slide 11: Sharp decline in Cost of funds drove NIM rebound
Sharp decline in Cost of funds drove NIM rebound 03 Financial results Total IEA and total funding recorded healthy expansion of 24% YoY CoF trended down significantly, allowing for NIM (LTM) to expand to 4.0%, even though asset yields remained under pressure from extended lending competition. NI
Slide 12: Robust credit asset growth, continuing to outpace the industry
Robust credit asset growth, continuing to outpace the industry 03 Financial results Credit balance expanded 7% YTD, well on-track to deliver credit quota granted by SBV, and significantly higher than industry’s +1.3% Following the creation of the CIBG and RBG divisions, Retail loans include ~VND
Slide 13: Healthier expansion across customer segments and sectors
Healthier expansion across customer segments and sectors 03 Financial results Corporate book expanded healthily by 8% YTD Based on the new perimeter of the RBG division, which includes ESME and MSME customers, Retail loans present a more balanced allocation between the various products Corporate
Slide 14: Real estate value-chain: sustained mortgage disbursement momentum
Real estate value-chain: sustained mortgage disbursement momentum 03 Financial Results Mortgage Prepayment & Disbursement (VND Bn) Diversification of credit and liquidity risk by financing multiple players in the value Prepayment 26,570 chain all the way to end home buyers 21,016 16,763 17,660 A
Slide 15: Robust CASA growth, supported by lower interest rate environment
Robust CASA growth, supported by lower interest rate environment 03 Financial results CASA balance increased by +2% QoQ and +49% YoY, reaching VND 185 Tn - the highest level in the history of the Bank CASA ratio stood at 40.5%, vs. 32.0% in 1Q23, supported by low rates environment and various in
Slide 16: Robust IB fees recovery enabled ~30% YoY growth in NFI
Robust IB fees recovery enabled ~30% YoY growth in NFI 03 Financial results IB fees grew 164% YoY, in line with bond market recovery Cards and LC, Cash & Settlement maintained growth momentum, up 9% and 17% YoY respectively Banca activity remained soft but improved through the quarter, with th
Slide 17: Sub-30% Cost Income Ratio driven by tight expense discipline
Sub-30% Cost Income Ratio driven by tight expense discipline 03 Financial results Rigorous OPEX management continued in 1Q24, translating into flat Staff costs and decreasing costs for Premises & Equipment CIR improved to 26.5%, driven by TOI expansion in the period Operating expenses (VND Bn) 1
Slide 18: Asset quality remained well under control
Asset quality remained well under control 03 Financial results NPL ratio remained broadly flat at 1.17% (vs. 1.19% at 4Q23), supported by healthy credit growth and managed asset quality Credit provisions reduced by 25.9% QoQ, while coverage ratio improved to 106% Provision expenses and LTM credi
Slide 19: Credit cost deep-dive
FY24 Outlook Credit cost deep-dive 04 Deep-dive B2 CIC impacts Up-tick in Special Mention loans (B2) driven by a limited number of mortgage customers, with expectation of 47 Own book remediation in the coming quarter 4,399 37 (461) 1,067 10 (582) (298) Satisfactory work-out of NPL balances, with
Slide 20: 1Q24 – Asset book health
1Q24 – Asset book health1 03 Financial results Average LTV (%) Credit structure by customer interest rate (%) 58% 54% 53% 55% 51% 31% 28% CI rate >10% 39% 38% 43% 44% 25% 23% 31% CI rate 8->10% 33% 21% 20% 47% 39% 36% 36% 38% CI rate <8% 28% 1Q23 2Q23 3Q23 4Q23 1Q24 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Int
Slide 21: Capital and liquidity positions remained robust
Capital and liquidity positions remained robust 03 Financial results CAR lowered to 14.2%, in line with risk appetite and the Bank's expectations given strong asset growth in last two quarters Well-diversified mix of funding with total funding from customers contributing ~72% at the end of 1Q24
Slide 22: Differentiated operating metrics relative to sector peers
Differentiated operating metrics relative to sector peers TCB 03 Financial results Industry median1 CASA CIR2 50.5% 50.4% 47.5% 46.5% 39.6% 42.2% 39.9% 40.5% 34.8% 35.0% 36.6% 34.2% 35.3% 34.0% 36.0% 37.0% 32.0% 34.9% 33.6% 41.9% 32.6% 30.0% 29.2% 33.8% 30.8% 34.8% 32.8% 18.4% 18.7% 17.7% 17.5% 16.0
Slide 23: FY24 Outlook
1Q24 Analyst Presentation Section 04 FY24 Outlook 23
Slide 24: Various catalysts will help drive GDP growth forecast of 6% for FY24
04 FY24 Outlook Various catalysts will help drive GDP growth forecast of 6% for FY24 Real Vietnam & World GDP (Real GDP growth indexed to 100% in 2019, YoY growth each year) Vietnam Catalysts for GDP growth in 2024 remain 6.0% largely intact: Continued inflows of FDI disbursement 5.1% Accelerate
Slide 25: FY24 Outlook: strong 1Q24 results support +18% PBT growth guidance
FY24 Outlook: strong 1Q24 results support +18% PBT growth guidance 04 FY24 outlook FY22 FY23 FY24 3M24 Improved Unchanged Declined Indicators Actual Actual Outlook Actual Comments Credit growth1 Possibility of a higher quota from SBV, reflecting the Bank’s 14.5 19.2 Quota 6.4 % strength including ca
Slide 26: Thank you.
1Q24 Analyst Presentation Thank you. C o n t acts Techcombank Hanoi Head Office 06 Quang Trung str., Hoan Kiem Dist., Hanoi ir@techcombank.com.vn 26
Slide 27: Appendix
1Q24 Analyst Presentation Appendix 27
Slide 28: 1Q24 Financial Highlights (1/3)
1Q24 Financial Highlights (1/3) 00 Appendix 3M24 vs 1Q24 vs 1Q24 vs Balance Sheet Unit: 1Q23 2Q23 3Q23 4Q23 1Q24 3M23 3M24 3M23 4Q23 1Q23 Total assets VND bn 723,518 732,470 781,279 849,482 885,653 723,518 885,653 22.4% 4.3% 22.4% Deposits from customers VND bn 387,298 381,947 409,045 454,661 458,04
Slide 29: 1Q24 Financial Highlights (2/3)
1Q24 Financial Highlights (2/3) 00 Appendix 3M24 vs 1Q24 vs 1Q24 vs Balance Sheet - Segmentation Unit: 1Q23 2Q23 3Q23 4Q23 1Q24 3M23 3M24 3M23 4Q23 1Q23 Loans to customers VND bn 465,425 466,546 475,606 518,642 559,277 465,425 559,277 20.2% 7.8% 20.2% Retail VND bn 213,028 197,546 197,176 204,861 21
Slide 30: 1Q24 Financial Highlights (3/3)
1Q24 Financial Highlights (3/3) 00 Appendix 3M24 vs 1Q24 vs 1Q24 vs NFI - Segmentation Unit: 1Q23 2Q23 3Q23 4Q23 1Q24 3M23 3M24 3M23 4Q23 1Q23 Bond business Bond issuance value VND bn 25,195 2,600 30,440 12,000 14,871 25,195 14,871 -41.0% 23.9% -41.0% Bond distribution value VND bn 7,851 12,832 17,0
Slide 31: Digital platform continues to be dominant channel
Digital platform continues to be dominant channel 00 Appendix Share of e-banking transaction improved to 93.5% in 1Q24 (from 92.7% in 1Q23) thanks to superior technology infrastructure Number of Retail E-banking customers1 (Mn, EOP) Share of retail transactions by channel Retail term deposits by c
Slide 32: Financial metrics formula
Financial metrics formula 00 Appendix Indicators Formula 𝑃𝑟𝑜𝑣𝑖𝑠𝑖𝑜𝑛 𝑟𝑒𝑠𝑒𝑟𝑣𝑒𝑠 𝑓𝑜𝑟 𝑙𝑜𝑎𝑛𝑠 𝑡𝑜 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 Excluding provision reserves for margin lending NPL coverage ratio 𝑁𝑃𝐿 𝑏𝑎𝑙𝑎𝑛𝑐𝑒 NPL balance excludes margin lending 𝐷𝑒𝑚𝑎𝑛𝑑 𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑠 +…
Slide 33: Financial metrics formula
Financial metrics formula 00 Appendix Indicators Formula 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 ∗ 4 Interest earning assets comprise: Balance Asset yield with SBV, Balance at credit institutions, loans 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑎𝑖𝑙𝑦 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑎𝑟𝑛𝑖𝑛𝑔 𝑎𝑠𝑠𝑒𝑡𝑠 to…
Slide 34: Glossary
Glossary 00 Appendix AUM : Assets under management OTT : Overseas telegraphic transfer CAGR : Compounded Annual Growth Rate PAT : Profit after tax CAR : Capital Adequacy Ratio PBT : Profit before tax CASA : Current Accounts and Saving Accounts PMI : Purchasing Managers' Index CIs : Credit institutio
Slide 35: 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