28 slides from Vietnam Technological & Commercial Joint Stock Bank's earnings presentation, January 2019
Slide 1: FY2018 Analyst Presentation
FY2018 Analyst Presentation January 2019 Hanoi
Slide 2: Executive summary
Executive summary Achieving our goal of being the # 1 Joint Stock Bank in Vietnam Corporate bond Credit & debit card #1 Owners equity Profit before tax Mortgage origination Bancassurance origination transactions Delivering a record of 13 consecutive quarters of YoY revenue growth Solid net interest
Slide 3: #1 Joint Stock Bank with profit before tax of VND10.7 Tn
#1 Joint Stock Bank with profit before tax of VND10.7 Tn Stable revenue base, healthy mix of NII (66%) and non-interest income (34%) Non-interest income driven by healthy growth in bonds, bancassurance and cards Maintained expense discipline with CIR of 35% Lower provisions and increased recoveries
Slide 4: We have delivered 13 consecutive quarters of YoY revenue growth
We have delivered 13 consecutive quarters of YoY revenue growth Executing our customer centric strategy is yielding sustainable top line growth YoY revenue growth1 % 36.4 33.8 30.9 31.4 30.6 26.0 23.1 19.0 17.3 16.3 11.5 9.1 3.0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2015 2016 2017 2018 Note: 1. Exc
Slide 5: Solid net interest income and non-interest income have contributed to a stable revenue base
Solid net interest income and non-interest income have contributed to a stable revenue base Deliberate focus on diversifying revenues and increasing non-interest income ROAA continues to improve as we can prudently manage the growth of our balance sheet Techcombank total revenue1 VND Tn, % Net inter
Slide 6: Strong and balanced credit portfolio - continuing to grow and shift towards Retail and Business Banking
Strong and balanced credit portfolio - continuing to grow and shift towards Retail and Business Banking Credit expansion is in line with guidance from SBV, and reflects a greater focus on bonds BB segment saw strong YoY growth with momentum expected to continue NIM compression reflects the continued
Slide 7: CASA ratio grew to 29%, driving deposit growth
CASA ratio grew to 29%, driving deposit growth CASA balances have almost doubled in three years and grew at 40% YoY Deposit growth has been driven primarily through retail, in line with strategy Deposit by business units VND Tn, % WB BB Retail CAGR 2015-18 +12% 201 173 171 36 3% 142 43 31 24 14% 32
Slide 8: Fee income remains a strategic priority and contributed ~21% of revenues
Fee income remains a strategic priority and contributed ~21% of revenues1 Core fee income highlights our leading market position in bonds, bancassurance and cards Net fee income2 VND Bn, % Others Bond Banca Cards Cash & Settlement CAGR 2015-18 3,536 408 21% +41% 2,491 1,160 138% 354 1,956 253 375 33
Slide 9: Maintained healthy cost to income ratio of 35% in 2018
Maintained healthy cost to income ratio of 35% in 2018 Staff costs increased 25% YoY, driven by increased headcount to support transformation CIR expected to remain at mid-30% level even with continued investments in technology and talent development CAGR Total operating expenses 2015-18 VND Bn, % S
Slide 10: Consistent execution of our five year strategic plan
Consistent execution of our five year strategic plan Our strategy is in Drivers 2016 Completion ratio 2017 2018 place ROAA 108% 137% 105% Profitability ROAE 108% 130% 97% We are very CIR 113% 134% 120% Bank-wide NIM 104% 107% 97% disciplined on Key Ratios LDR (excluding corporate bonds) 108% 137% 11
Slide 11: Our strategy is to put the customer at the center of everything we do
Our strategy is to put the customer at the center of everything we do Our strategy consists of: Customer centricity Foundational excellence Performance management Clear and simple for all employees to understand and execute Easy to measure success metrics promote transparency 11
Slide 12: We continue to focus on domestic, consumption-led economic sectors
We continue to focus on domestic, consumption-led economic sectors… These six sectors constitute nearly half of Vietnam’s GDP (~49% in 2017) These sectors are growing more than twice as fast as GDP: 14% vs 5.3%1 and will dominate the economy in the near term We leverage the domestic value chains wit
Slide 13: …and the value chains of our customers in these six sectors
…and the value chains of our customers in these six sectors We understand the needs of our large corporate customers and their ecosystems We develop tailored solutions and unique propositions to serve customers throughout the ecosystem What have we achieved in BB Food and beverages value chain in 20
Slide 14: We aligned our WB business model to focus on six key economic sectors
We aligned our WB business model to focus on six key economic sectors Focus economic sectors Long term needs Daily needs Financial Travel & Utilities & Housing Auto FMCG services leisure telecom Reduce economic and credit risk Wholesale Banking Diversify our loan portfolio Business Banking Provide o
Slide 15: In retail, delighting our customer is key to our drive to be #1
In retail, delighting our customer is key to our drive to be #1 Increasing customer engagement and enhancing experience through all services and channels - full range of customer interaction – from free automated, low touch services (e.g., internet banking, mobile banking) to one-on-one customer ser
Slide 16: We completely redesigned Business Banking
We completely redesigned Business Banking We totally transformed Business Banking, from choosing customer segments and economic sectors to redesigning end-to-end risk processes and upgrading technology Customized sub-segment focused Customer segmentation solutions via business programs Economic sect
Slide 17: BB transformation is delivering strong growth
BB transformation is delivering strong growth BB embarked on an ambitious transformation journey 3 years ago, focused on reshaping and de-risking the business and this is now starting to deliver results CAGR BB loans 2015-18 BB revenues VND Tn, % +49% VND Tn +33% 0% 31 +4% 2.0 21 21 30% 1.5 1.5 18 1
Slide 18: Customer: BB segmentation
Customer: BB segmentation There are three differentiated and distinct business models for each segment RMs originate and deepen relationships with customers in the ecosystems of large corporates with the aim of becoming their primary bank Active customers Relationship Managers #, 2018 #, 2018 ~1,800
Slide 19: Product and pricing: Customized sub-segment focused solutions via business programs
Product and pricing: Customized sub-segment focused solutions via business programs Programs are designed to serve large corporate customers and their ecosystems in the six economic sectors We offer customized solutions based on unique needs of the value chain Example of a business program What did
Slide 20: Sales and Services: Business Banking Centers
Sales and Services: Business Banking Centers We centralize and specialize sales and services for focus sectors and sub-sectors to drive higher wallet share, increased customer satisfaction, and better employee performance and satisfaction Established 22 Large BBCs1 What are we doing What did we achi
Slide 21: IT and Operations: Zero fee digital payment solutions
IT and Operations: Zero fee digital payment solutions We accelerated the pace of digitization via launch of zero fee digital payment solutions in July 2018 CASA balances increased by 31% since launch (Dec-18 vs Jun-18) Number of active customers Transaction per customer Value per transaction Total t
Slide 22: Risk: End-to-end risk process re-engineering
Risk: End-to-end risk process re-engineering We are simplifying and digitizing end-to-end risk-related processes What are we doing What did we achieve Defining customer selection criteria backed by a comprehensive We piloted this in 8 BBCs and noted significant risk framework improvement in: Standar
Slide 23: People development: Market leading front-line capabilities
People development: Market leading front-line capabilities… We are hiring talent with the right mix of experience and fresh talent across all levels and training to enable successful delivery of leading to improved employees satisfaction and reduction in attrition Talent acquisition What are we doin
Slide 24: … leads to high employee engagement and job satisfaction
… leads to high employee engagement and job satisfaction In addition to training and development, we have launched several employee benefit programs (e.g., subsidized loan programs for employees, TechcomKid), and new rewards and recognitions, (e.g., HiPer and Techcomers awards) Satisfied, engaged an
Slide 25: Further, we manage our total cost per employee and keep CIR in check
Further, we manage our total cost per employee and keep CIR in check Total employee base grew by 17% and cost per employee grew by 11% over the last 12 months Total employees Cost per employee Cost to income ratio1 # VND Mn % +10% -5% +9% 9,757 646 41 583 37 8,328 542 35 7,616 7,787 489 31 2015 2016
Slide 26: Glossary
Glossary BB : Business Banking NIM : Net Interest Margin BBC : Business Banking Center NOII : Non-interest Income CAR : Capital Adequacy Ratio NPL : Non-performing Loan CASA : Current Accounts and Saving Accounts PAT : Profit After Tax CIR : Cost to Income Ratio PBT : Profit Before Tax EOP : End of
Slide 27: 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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