SHB sets sights on pre-tax profit hike, bad debt ratio dip in 2024

Saigon-Hanoi Commercial Joint Stock Bank, one of the top private banks in Vietnam, is aiming for VND11.28 trillion ($444 million) in pre-tax profit in 2024, up 22.2% year-over-year, its chairman Do Quang Hien told the bank's AGM on Thursday.

The bank, listed on the Ho Chi Minh Stock Exchange as SHB, aims to raise its total assets by 11.2% year-on-year to VND701 trillion ($27.57 billion) this year, with total outstanding credit increasing by 14% to VND518.5 trillion ($20.4 billion).

In 2024, the firm plans to allocate VND5.86 ($230.47 million) for dividend payouts, with a cash dividend of 5%, or VND500 a share. Of the total, VND4.03 trillion ($158.45 million) will be issued as a stock dividend of 11%. After the payouts, the bank’s charter capital is anticipated to rise to VND40.66 trillion ($1.6 billion).

In response to shareholders’ inquiries, SHB chairman Do Quang Hien stated that the firm has proposed plans to resolve bad debts by September, with the goal of reducing its bad debt ratio to below 2% this year and beyond, down from 2.7% last year.

In addition to financial objectives, SHB will prioritize restructuring assets and settling debts this year, Hien said, noting that real estate loans make up 16% of the bank’s total portfolio.

Regarding the lender’s plan related for foreign shareholders, Hien said that the company has signed a principal contract with its Lao subsidiary, SHB Laos, to transfer the latter’s equity to foreign partners at a valuation considered higher than the standard level.

SHB is also looking for partners to whom the bank will transfer both SHB Cambodia and its equity, he added.

In reference to the building of SHB’s headquarters at the Ly Thuong Kiet-Hang Bai-Vong Duc intersection in the heart of Hanoi, Hien stated that the bank is projected to complete all procedures and break ground on it this year. Situated on a 2,200-square-meter plot, the headquarters are scheduled for completion within the next three years.

Talking about the 2024 pre-tax profit target, SHB’s general director Ngo Thu Ha said that the goal has been determined by considering the potential of both customers and the market. She outlined the bank's strategy, which includes ongoing efforts to diversify its products, invest in its systems, reduce input costs, restructure capital, boost non-credit incomes, closely monitor credit quality, and handle bad debts.

In the first quarter of 2024, SHB earned VND4.02 trillion ($158.01 million) in pre-tax profit, reaching 35% of the year’s plan, Ha added.

At the AGM, SHB’s board of directors approved the dismissal of SHB vice chairman Do Duc Hai and Haroon Anwar Sheikh, an independent member. As a result, the SHB leadership now has six members, who are Do Quang Hien, vice chairman Do Quang Vinh - Hien's son, Thai Quoc Minh, Ngo Thu Ha, Pham Viet Dan, and Do Van Sinh – an independent member.