35 slides from Vietnam Technological & Commercial Joint Stock Bank's earnings presentation, Oct 22, 2024
Slide 1: Techcombank 9M24 Analyst Presentation
Techcombank 9M24 Analyst Presentation Hanoi, Oct 22 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
9M24 Analyst Presentation Section 01 Highlights 3
Slide 4: Another quarter of strong results
Another quarter of strong results Improved Declined 01 Highlights ▪ TOI excl. recoveries stayed at elevated level of c. VND11.3 tn for 3Q24, +11% YoY despite some VND 37.4 Tn headwinds in non-interest income TOI + 28.9% YoY ▪ 3Q24 NII expanded 23% YoY thanks to stronger-than-industry credit growth a
Slide 5: Economic Update
9M24 Analyst Presentation Section 02 Economic Update 5
Slide 6: Extended GDP growth momentum with controlled inflation
02 Economic update Extended GDP growth momentum with controlled inflation providing support for economic activities Better than last year Indicators 3Q23 4Q23 1Q24 2Q24 3Q24 2024F GDP growth 6.0 6.8 5.3 6.7 5.9 7.1 7.4 YoY, % Inflation 3.7 2.9 3.5 3.8 4.4 3.5 avg., % Retail sales growth1 7.3 7.1 5.1
Slide 7: Further pick-up in credit demand, alleviated FX pressure
02 Economic update Further pick-up in credit demand, alongside alleviated FX pressure Banking system's deposit & credit growth CASA ratio of G27 Weighted deposit interest rates of G18 %, YTD Deposit growth Credit growth % % 6M 12M 7.9 24 8 11.1 21.8 6.9 8.8 22 7 8.5 7.9 6.8 6.9 20 6 6.1 6.0 5.0 4.8
Slide 8: Financial Results
9M24 Analyst Presentation Section 03 Financial Results 8
Slide 9: Financial highlights
03 Financial results Financial highlights 3Q23 3Q24 9M23 9M24 3Q23 3Q24 TOI1 growth (YoY) 2.3% 11.3% -5.1% 28.3% Credit growth3 (YTD) 11.4% 17.4% NII growth (YoY) -3.9% 22.8% -14.4% 33.9% NIM (LTM) 4.1% 4.3% NFI2 growth (YoY) 12.9% -7.3% 7.6% 17.1% Loans & Asset NPL (loans) 1.40% 1.35% P&L NFI2/TOI1
Slide 10: Double-digit growth in TOI & PBT; strong QoQ improvement in provision expenses
03 Financial results Double-digit growth in TOI & PBT; strong QoQ improvement in provision expenses ▪ VND11.8 tn TOI in 3Q24 reflected robust NII growth and recoveries, despite more muted NFI and lack of income one-offs ▪ Effective cost discipline and lower provision expenses helped to deliver 23% Y
Slide 11: Strong expansion of asset base; NIM maintained above 4%
Strong expansion of asset base; NIM was maintained above 4% level 03 Financial results ▪ On consolidated basis, total interest earning assets expanded 13.7% year-to-date, thanks to strong credit growth1 of 17.4% year-to-date ▪ Cost of funds edged up slightly to 3.4%, reflecting shift to customer fun
Slide 12: Retail book continued to post encouragingly higher QoQ
03 Financial results Retail book continued to post encouragingly higher QoQ ▪ Progress in segment diversification, with retail book increasing 6.0% QoQ, compared to 2.9% QoQ for corporate book. Corporate bonds balances fell 20% QoQ to VND33 tn mostly due to maturities in the reporting period ▪ Lower
Slide 13: Healthy expansion across customer segments and sectors
03 Financial results Healthy expansion across customer segments and sectors ▪ Retail book grew 6% in the quarter, double the growth of the corporate book, driven by strong pick up in mortgages ▪ Within corporate book, outstanding credit balance to RE customers was flat QoQ, as a result of diversific
Slide 14: Real estate value-chain: mortgage prepayment dropped to 1-year low
Real estate value-chain: mortgage prepayment dropped to 1-year low, disbursement 03 Financial Results continued resilient momentum ▪ Despite seasonal effect, disbursement amount remained strong at VND28 tn in Mortgage Prepayment & Disbursement (VND Bn) 3Q24 26,570 Pre-payment 24,109 ▪ Pre-payments s
Slide 15: Customer funding continued its strong momentum
Customer funding continued its strong momentum 03 Financial results ▪ Current account balances remaining at elevated level of ~VND180 tn for 4 quarters consecutively ▪ Current accounts & saving accounts (CASA) including Auto-earning balances hit VND200 tn at the end of 3Q24, implying 40.5% CASA rati
Slide 16: Resilient NFI amidst challenges in the operating environment
Resilient NFI amidst challenges in the operating environment 03 Financial results ▪ Lower NFI QoQ due to high base with some one-off income recognition in 2Q24, combined with temporary impact of regulatory and strategic changes for banca and LC business 3Q24 vs 9M24 vs Fee income breakdown by produc
Slide 17: Sub-30% Cost-Income Ratio, tracking the Bank's investment plan
Sub-30% Cost-Income Ratio, tracking the Bank’s investment plan 03 Financial results ▪ Sub-30% CIR was driven by TOI expansion in the period, while OPEX tracked the Bank's investment plan 3Q24 vs 9M24 vs Operating expenses (VND Bn) 3Q23 9M23 33.2% 28.4% 34.8% 32.8% CIR ratio 26.5% 29.4% 29.2% 10,629
Slide 18: Asset quality remained within risk appetite
03 Financial results Asset quality remained within risk appetite ▪ Credit cost LTM ending 3Q24 remained at 1.1%, of which credit cost in 3Q24 was 76 bps (down from average of 116bps in the 3 previous quarters) ▪ Loan loss coverage ratio remained healthy, above 100% Provision expenses and LTM credit
Slide 19: Credit cost deep-dive
04 Financial results Credit cost deep-dive B2 CIC impacts ▪ Specific provision normalised to below VND1 tn, driven by Own book 89 significantly lower write-offs 3,027 10 79 (471) ▪ Both B2 and NPL formation remained at high level but 1,102 (703) (1,174) (334) expected to have peaked. Higher B2 forma
Slide 20: 3Q24 – Asset book health
03 Financial results 3Q24 – Asset book health1 ▪ Asset structure reflected changes to interest rate environment and flexible pricing policy, and remained in line with expectations Average LTV (%) Credit structure2 by customer interest (CI) rate (%) 53% 55% 53% 55% 51% 28% 23% 21% 31% CI rate >10% 43
Slide 21: Capital and liquidity positions remained robust
03 Financial results Capital and liquidity positions remained robust ▪ CAR improved to 15.1% thanks to robust retained earnings and benefit from asset diversification on risk-weighted assets ▪ Ratio of funding from customers further increased to over 75% at the end of 3Q24 Capital Adequacy Ratio1 (C
Slide 22: Differentiated operating metrics relative to sector peers
TCB 03 Financial results Differentiated operating metrics relative to sector peers Industry median1 CASA CIR2 50.5% 50.4% 47.5% 46.5% 40% 42% 39.9% 42.5% 40.3% 40.5% 35% 35% 37% 34% 35% 34% 36% 34% 36% 37.0% 32.0% 34.9% 33.6% 42% 33% 30% 29% 34% 31% 35% 33% 18.4% 18.7% 17.7% 17.5% 16.0% 13.6% 13.9%
Slide 23: FY24 Outlook
9M24 Analyst Presentation Section 04 FY24 Outlook 23
Slide 24: On track to deliver GDP growth forecast of 6.8% for FY24
04 FY24 Outlook On track to deliver GDP growth forecast of 6.8% for FY24 Real Vietnam & World GDP Revised FY24 and FY25 GDP growth to 6.8%, supported by: (Real GDP growth indexed to 100% in 2019, YoY growth each year) ▪ Accelerated public spending and investment in the last Vietnam months of the yea
Slide 25: FY24 Outlook: PBT to be in-line or close to AGM guidance
04 FY24 Outlook FY24 Outlook: PBT to be in-line or close to AGM guidance FY22 FY23 9M24 FY24 Improved Unchanged Declined Indicators Actual Actual Actual Outlook3 Commentary Credit growth1 Possibility of a higher quota from SBV, reflecting the Bank’s 14.5 19.2 17.4 Quota strength including capabiliti
Slide 26: Thank you.
9M24 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
9M24 Analyst Presentation Appendix 27
Slide 28: 3Q24 Financial Highlights (1/3)
00 Appendix 3Q24 Financial Highlights (1/3) 9M24 vs 3Q24 vs 3Q24 vs Balance Sheet Unit: 3Q23 4Q23 1Q24 2Q24 3Q24 9M23 9M24 9M23 2Q24 3Q23 Total assets VND bn 781,279 849,482 885,653 908,307 927,053 781,279 927,053 18.7% 2.1% 18.7% Deposits from customers VND bn 409,045 454,661 458,041 481,860 494,95
Slide 29: 3Q24 Financial Highlights (2/3)
00 Appendix 3Q24 Financial Highlights (2/3) 9M24 vs 3Q24 vs 3Q24 vs Balance Sheet - Segmentation Unit: 3Q23 4Q23 1Q24 2Q24 3Q24 9M23 9M24 9M23 2Q24 3Q23 Loans to customers VND bn 475,606 518,642 559,277 592,083 626,291 475,606 626,291 31.7% 5.8% 31.7% Retail VND bn 197,176 204,861 213,435 224,827 23
Slide 30: 3Q24 Financial Highlights (3/3)
00 Appendix 3Q24 Financial Highlights (3/3) 9M24 vs 3Q24 vs 3Q24 vs NFI - Segmentation Unit: 3Q23 4Q23 1Q24 2Q24 3Q24 9M23 9M24 9M23 2Q24 3Q23 Bond business Bond issuance volume VND bn 30,440 12,000 14,871 10,090 14,990 58,235 39,951 -31.4% 48.6% -50.8% Bond distribution volume VND bn 17,031 22,764
Slide 31: Digital platform continues to be dominant channel
00 Appendix Digital platform continues to be dominant channel ▪ Share of e-banking transaction continued to be at high level (>90%) Number of Retail E-banking customers1 (Mn, EOP) Share of retail transactions by channel Retail term deposits by channel -0.2% Online Offline E-banking POS 8.1 8.1 Branc
Slide 32: Financial metrics formula
00 Appendix Financial metrics formula 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
00 Appendix Financial metrics formula Indicators Formula 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑞𝑢𝑎𝑟𝑡𝑒𝑟 ∗ 4 ▪ Interest earning assets comprise: Balance Asset yields with SBV, Balance at credit institutions, loans 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑎𝑖𝑙𝑦 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑎𝑟𝑛𝑖𝑛𝑔 𝑎𝑠𝑠𝑒𝑡𝑠 to…
Slide 34: Glossary
00 Appendix Glossary 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