Half of Military Bank credit earmarked for retail banking, SMEs: CEO

At least 50% of Hanoi-based Military Bank’s (MB) credit expansion in 2025 will go to retail banking and small and medium enterprises, while the rest to large enterprises.

Pham Nhu Anh, board member and general director of the Vietnamese bank, made the statement at its online investors conference on Friday, which gathered over 300 representatives from investment funds and securities companies.

MB, listed on the Ho Chi Minh Stock Exchange as MBB, will also continue to focus on lending to manufacturing companies and other priority areas (like export and agriculture) as directed the State Bank of Vietnam, he added.

Regarding orientations for 2025, Anh noted that the bank aims to increase its market share, develop retail banking in a more sustainable and efficient manner, enhance digitalization to make digital channel business account for about 40% of total revenue, strengthen smart risk management, and deploy comprehensive ESG (environmental, social, and governance).

The military-run bank’s pre-tax profit in 2024 hit VND27.6 trillion ($1.09 billion), up 12% year-on-year, on revenue of VND47.4 trillion ($1.87 billion), up 21%, the bank reported at the conference.

Explaining why revenue increased by 21% but profit rose only 12%, Anh said the bank had actively made provisions to create “a protective barrier for the future as the environment becomes difficult”.

Its bad debt was 1.2%; bad debt coverage ratio was over 100%.

Credit in 2024 expanded 25% to VND766 trillion ($30.19 billion), while capital mobilization rose by 19% to VND800 trillion ($31.53 billion).

By the end of 2024, MB’s assets had reached more than VND1,000 trillion ($39.42 billion), an increase of 18% compared to the beginning of the year.

Member companies accounted for 5% of MB’s profit. Notably, broker MBS earned nearly VND1 trillion ($39.42 million) in profit.

MB aims to enlarge total assets in 2025 to over VND1,300 trillion ($51.24 billion), up 22%, while increasing both credit and capital mobilization to over VND1,000 trillion ($39.42 billion) each, up 26% and 25% respectively. Pre-tax profit target is set at VND32 trillion ($1.34 billion), an increase of 10%.

In 2024, digital transformation continued to be MB’s "bright spot" and growth driver. In the past five years, the number of MB’s customers grew 13 times thanks to its digital transformation, to over 30 million.

MB’s scale of transaction via National Payment Corporation of Vietnam (Napas) remained at the first position. Revenue from digital channels increased sharply, accounting for over 30% by end-2024.

“MB’s capacity to serve transactions on digital channels is equivalent to those of leading Asian banks. Up to 98% of transactions were performed on digital channels,” said Dam Nhan Duc, the bank’s chief economist.

Referring to the Banking-as-a-Service (BAAS) model in MB’s digital transformation strategy, Duc said by end-Q3/2024, MB had the most diversified contingent of APIs (application programming interface) in the market, with more than 1,200 self-developed APIs.

BAAS is a model that allows third partners to connect to the bank’s system through APIs to directly provide financial-banking services to customers on that partner’s application systems/platforms.

BAAS MB has 668 integrated partners with a transaction value of VND363 trillion ($14.31 billion), generating nearly VND300 billion ($11.82 million) in revenue.

Answering shareholders’ questions about the development strategy of MBV, formerly known as OceanBank, the MB CEO said that after the mandatory transfer of OceanBank last October, MB sent experts to the weak bank to help it quickly stabilize, strengthen its apparatus, and build solutions for 2025.

“In 2025, along with the general development of the market, we hope MBV will prosper and record positive growth,” he added.

MB is one of the domestic credit institutions that have given Novaland and Trung Nam Group long-term loans and invested in their bonds the most. Answering investors' queries about these loans, CEO Pham Nhu Anh said the debts are both in Group 1, which means they are within the payment terms and are considered recoverable by the bank.

"Projects such as Aqua City Dong Nai and NovaWorld Phan Thiet are in the process of legal clearance. They are being implemented with government support," Anh said.

Pham Thi Trung Ha, board member and deputy general director of MB, added that the debts of Trung Nam and Novaland both have collateral assets of 2-2.5 times the outstanding debt. "Currently, these businesses are paying their debts normally," she added.