A new chapter for Vietnam's private lender National Citizen Bank

The recent financial results of National Citizen Bank (NCB) show that the Vietnamese private lender has overcome hardships and is entering a period of recovery.

NCB’s history traces back to its founding as Song Kien Rural Commercial Joint Stock Bank in 1995 in the Mekong Delta province of Kien Giang. In 2006, the bank transitioned into a joint stock commercial institution, rebranding as Navibank (Nam Viet Commercial Joint Stock Bank).

During this period, Navibank became associated with the influence of businessman Dang Thanh Tam and served as a key funding channel for his Kinh Bac City Development Holding Corporation (KBC) ecosystem.

In 2013, the ownership of Navibank was reshuffled after Tam’s withdrawal, which led to the emergence of a new investor group led by Nguyen Tien Dung and his wife, Tran Hai Anh, the owners of Gami Group. Navibank was subsequently renamed National Citizen Bank (NCB) and moved its headquarters to Hanoi.

Ownership shift and restructuring

For nine years following the ownership change, NCB did not gain significant attention in the banking sector. As of 2020, the bank's total assets stood at VND89.6 trillion ($3.5 billion), with deposits of VND72.09 trillion, loans of VND39.85 trillion, and a charter capital of VND4.1 trillion ($160.9 million), placing it among the smallest joint stock commercial banks.

However, concerns about NCB’s asset quality persisted, as non-performing assets (NPAs), considered “dead assets” with little profit generation, were alarmingly high. Between 2013 and 2020, the ratio of non-performing assets to total assets never dropped below 14%, peaking at 23.7% in 2020. If over VND5.8 trillion ($227.6 million) of bad debts sold to the Vietnam Asset Management Company (VAMC) were factored in, the ratio reached 30%, raising alarm bells.

In early 2021, NCB’s stock began trading actively, with liquidity surging and the price increasing from just over VND7,000 ($0.27) to a peak of nearly VND30,000 ($1.18) per share in September 2021. By the first half of 2022, the stock price had risen further, reaching VND40,000 per share and stabilizing between VND30,000 and VND40,000.

The major ownership change at NCB became clearer in 2021 when a large portion of shares changed hands. Between July 1, 2021 and June 30, 2022, approximately 384 million shares, or 94% of NCB’s stake, were traded via throughput, totaling nearly VND10.7 trillion ($420.02 million). The share price ranged from VND27,800 ($1.09) to VND37,000 ($1.45).

In July 2021, NCB’s new investors were formally revealed, and at an extraordinary general meeting of shareholders, two representatives from the new investor group, including Bui Thi Thanh Huong, were elected to the bank’s board of directors.

Huong became board chairwoman, replacing Nguyen Tien Dung, who was then named vice chairman. Two years later, in September 2023, Dung resigned from the board, and the extraordinary meeting accepted his resignation. In September and October 2023, around 85 million shares, or a 15.4% stake, were traded at an average price of over VND13,000 ($0.51).

A new chapter for NCB

After strengthening its apparatus with a team of experienced senior leaders, NCB has seen rapid transformation. One of the most notable changes was the bank’s successful increase in its charter capital, from VND5.6 trillion to VND11.78 trillion ($462.23 million) at the end of 2023, through private placements to strategic investors at VND10,000 ($0.39) per share. NCB plans to continue increasing its charter capital to VND29 trillion ($1.14 billion) by 2028.

Regarding the loss of VND5.13 trillion (around $201.33 million) in 2024, NCB explained that it had to write off accrued income from loans and securities investments amounting to VND2.8 trillion ($109.87 million) and address non-performing assets totaling VND1.73 trillion as part of its restructuring efforts.

Despite the big loss, several positive signs have emerged in NCB's financial report. Notably, the bank reduced its non-performing assets significantly to VND9.63 trillion ($377.87 million), or 8% of total assets, down from 17% at the beginning of the year and 23.7% in 2020.

Additionally, the non-performing loan ratio at the end of 2024 dropped to 19.5% from 29.8% at the start of the year, with Group 4 (doubtful debt) dropping by 87%.

Moreover, NCB’s financial statement revealed that the bank has started to generate positive cash flow from its core lending and deposit activities, with a net cash inflow of nearly VND600 billion ($23.54 million) in 2024, compared to the negative VND1.4 trillion in 2023.