Techcombank's 2023 net profit drops 10% to $731 mln

Major Vietnamese private lender Techcombank reported VND40.06 trillion ($1.63 billion) in total income and over VND18 trillion ($731.4 million) in net profit last year, down 1.2% and 10.4% year-on-year, respectively.

According to its freshly-announced consolidated financial statements, Techcombank, listed on the Ho Chi Minh Stock Exchange (HoSE) as TCB, recorded a total income increase of 18% to VND11 trillion ($447million) in the fourth quarter of 2023.

The result was attributed to an 11.4% increase in net interest income to VND7.6 trillion, a profit of VND312 billion ($308.8 million) from remittance activities, and VND247 billion ($10 million) from securities investments.

Its operating costs decreased slightly to VND3.61 trillion ($146.7 million), but credit risk provision costs soared from VND691 billion to VND1.63 trillion ($66.23 million). As a result, Techcombank reported a net profit of VND4.44 trillion ($180.4 million) in Q4/2023, up 25.2% compared to the low base of the same period in 2022, marking the only quarterly growth for the year.

The bank’s total assets at the end of 2023 reached VND849.5 trillion ($34.52 billion), an increase of 21.5% compared to the beginning of the year. Total loans increased by 23.2% to VND512.51 trillion ($20.83 billion), while deposits and credit grants to other credit institutions also rose by 25.6% to VND104 trillion ($4.23 billion). The bad debt ratio was 1.19% and provision costs increased by 102.5% year-on-year.

The bank said that individual credit regained growth momentum in the fourth quarter mainly due to the return of home loan demand and the recovery of margin lending activities.

Meanwhile, corporate credit (including outstanding loans and bonds) expanded 8.2% in Q4 and 45% compared to the beginning of the year. Outstanding loans from small- and medium-sized enterprises increased by 16.8% from the year-beginning.

Deposits also jumped 27% to VND454.66 trillion ($18.47 billion). The current account savings account balance increased for three consecutive quarters, reaching VND181.5 trillion ($7.38 billion), a rise of 37% from 2022. Term deposits hit VND273.2 trillion ($11.1 billion), up 20.9% compared to the beginning of the year.

The bank's capital adequacy ratio according to Basel II (the second set of international banking regulations for minimum capital requirements established by the Basel Committee on Banking Supervision) reached 14.4%, continuing to maintain its leading position in the banking industry and much higher than the minimum requirement of 8%.

Techcombank CEO Jens Lottner said the bank promoted its operating efficiency in the last quarter of 2023, fulfilling or exceeding all targets. It attracted more than 2.6 million new customers during the year, increasing the total to 13.4 million, he said, adding the number of newly opened cards reached 1.2 million.

The CEO believes that the transformation strategy and positive results in a challenging 2023 have affirmed the bank's internal strength, creating a stepping stone for its growth in the coming years and allowing the bank to plan long-term cash dividend payments for shareholders.

On the stock market, TCB closed Wednesday at VND35,250 ($1.43) per share.