Vietnam's private lender OCB aims to acquire securities company given market prospects

Ho Chi Minh City-headquartered Orient Commercial Bank (HoSE: OCB) will acquire a securities company when conditions become more favorable, given the growth potential of the stock market, said chairman Trinh Van Tuan.

Responding to shareholders' enquiries at the bank’s 2025 AGM on Tuesday, he noted that Vietnam’s stock market holds "significant long-term growth potential", given the relatively low percentage of participants and the substantial opportunity for the market status upgrade from “frontier” to “emerging”.

This is a sector that banks across the system, including OCB, are particularly focused on, as it helps complete their financial ecosystem, drive development, diversify product and service offerings, and increase non-interest income, he emphasized.

Tuan affirmed that OCB also needs such an investment arm to better coordinate services and serve clients more effectively, especially high-priority customers. However, due to currently unfavorable market conditions, the lender has opted to implement a comprehensive strategic partnership with VIS Securities in the meantime.

Regarding its business plan, the chairman said OCB targets total assets of VND316.78 trillion ($12.23 billion) in 2025, marking a 13% year-on-year increase. Customer deposits from the Tier-1 market are expected to grow by 14% to VND218.84 trillion.

Notably, building on a strong foundation established in 2024 and through a significant shift in its customer portfolio toward high-growth potential clients, the bank expects a 16% rise in total outstanding loans from the first-tier market, reaching VND208.47 trillion ($8.05 billion).

Its pre-tax profit is projected to rise by 33% from 2024 to VND5.24 trillion ($202.3 million).

To realize these ambitious goals, Tuan said his bank will expand its services to the value chain, suppliers, distribution channels, and end-customers.

It also aims to grow its retail customer base through personalized, tailored products, and develop its individual client base via the ecosystem of its corporate clients. At the same time, the bank will focus on accelerating growth in the SME (small- and medium-sized enterprise) segment.

The lender also identifies the FDI segment as a key growth opportunity, particularly in light of capital shifts from China, he added.

After four years of strategic partnership, Japan’s Aozora Bank, Ltd. has actively supported OCB in expanding its Japanese corporate and retail client base, achieving impressive net revenue growth of 52% and 43% respectively in 2024.

Aozora has also helped OCB become the first Vietnamese bank to launch a Japanese-language version of its OCB OMNI digital banking app, available to both individual and corporate clients. This significantly enhances user experience and satisfaction among Japanese customers living and doing business in Vietnam.

First-ever cash dividend

According to the chairman, in 2024, OCB made strong strides toward sustainable development, launching a series of preferential credit programs totalling over VND65 trillion ($2.5 billion) and supporting 15,000 corporate and individual clients, especially SMEs, in accessing capital at competitive interest rates.

The bank accelerated its digital transformation initiatives, significantly reducing transaction time for customers. As a result, OCB achieved a credit growth rate of nearly 20% in Tier-1 market lending, surpassing the sector’s average of 15.08%.

Lending to individual clients rose by 11.4%, while SME loans soared by 51.7% year-on-year. Total assets climbed to VND280.7 trillion ($10.83 billion), a 17% increase compared to 2023.

Tier-1 customer deposits reached VND192.4 trillion ($7.43 billion), up 14.5% from 2023, fulfilling 98% of the 2024 target. Notably, deposits from both retail customers and businesses grew by 13.1%, outpacing the industry average.

Retail deposits expanded 16% and accounted for 65% of total customer deposits. Despite rising interest rates in the market, OCB maintained low deposit rates to support lending activities.

Thanks to these efforts, OCB recorded total net revenue of VND10.07 trillion ($388.7 million) in 2024, up 12.7% year-on-year. Net interest income alone hit VND8.61 trillion, marking a 27.2% surge. However, pre-tax profit slightly declined to over VND4 trillion.

CEO Pham Hong Hai attributed the lower-than-expected profit to a rise in non-performing loans, particularly among retail clients. Additionally, OCB proactively increased investments in its infrastructure, technology, and digital transformation, while also raising credit risk provisions to strengthen its financial buffer.

With the 2024 performance, the board of directors proposed a 7% cash dividend, equivalent to approximately VND1.73 trillion ($66.77 million), marking OCB’s first-ever cash dividend since its listing on the stock exchange. Previously, the bank primarily distributed dividends via bonus shares or capital increases from retained earnings.

To meet capital needs, the bank also plans to issue new shares to raise its charter capital by 8% to VND26.63 trillion ($1.03 billion), using retained earnings. The proceeds will be used to enhance business capital, fund investments, lending, and infrastructure development.

Aozora Bank, Ltd. will remain OCB’s sole major shareholder with a 15% stake, unchanged from the previous years.

On the Ho Chi Minh Stock Exchange (HoSE), OCB closed Tuesday at VND10,450 ($0.4) per share.