Vietnam's corporate bond market on road to recovery: Techcombank chairman

Vietnam's corporate bond market is set for a revival thanks to the government's Decree 08, and Techcombank views the news as an opportunity, said the private lender’s chairman Ho Hung Anh.

Addressing the bank’s annual general meeting in Hanoi on Saturday, Anh said the major lender has accumulated experience over the years to become a market leader.

He noted his bank has been strong in the corporate bond and real estate markets in recent years, but it has focused on clients with positive business records. “Therefore, even in tough times, Techcombank can manage risks and make profits.”

During the property market downturn, much of his bank's credit was caught up in delayed construction projects, he noted.

Regarding bad debts, Anh said Techcombank is managing its NPL risks well, illustrated by the fact that its bad debt ratio is still much lower than regulated, without divulging the actual figure.

Among issued corporate bonds under its management, none are overdue, he stressed.

For the first quarter of this year, the banker said Techcombank secured a better-than-planned performance. With an attitude of precaution, the lender set its 2023 profit goal lower than last year’s performance, he added.

The AGM approved the bank’s business plans for 2023 with a consolidated pre-tax profit of VND22 trillion ($937 million), down 14% compared to 2022; credit growth to be at least 15% subject to the State Bank of Vietnam; the on-balance sheet bad debt ratio lower than 1.5%; and capital mobilization in line with actual credit growth to optimize mobilization sources.

Regarding dividends, Techcombank will this year hold all profits after setting up provisions, meaning no dividend payout. This will be the 12th year the bank has not paid dividends in cash. Its total unused profit as of January 1, 2023 exceeds VND58 trillion ($2.47 billion).

Techcombank will issue shares under its Employee Stock Option Program (ESOP) to raise capital, with 5.3 million shares to be issued at VND10,000 ($0.43) each. After the issuance, its charter capital will become VND35.23 trillion ($1.5 billion) from VND35.17 trillion ($1.49 billion). This is the sixth consecutive year for Techcombank to issue ESOP shares to employees.