The Techcombank's 2021 Annual General Meeting of Shareholders was held in Hà Nội. — Photo courtesy of the bank

HÀ NỘI —  Techcombank became the first non-State-owned commercial bank to join Việt Nam’s “billion-dollar profit” club in 2021, with a before-tax profit of VNĐ23.2 trillion, posting 47.1 per cent year-on-year increase.

The information was released at its 2021 Annual General Meeting of Shareholders held in Hà Nội on Saturday.

With this fifth consecutive year of double-digit growth, the compounded average growth rate (CAGR) of Techcombank’s profits over the 2016-21 period reached a record level of 50 per cent.

During 2021, Techcombank grew its total assets by 29.4 per cent, to VNĐ568.7 trillion, while delivering an industry-leading return on assets (ROA) of 3.7 per cent. The current account and savings account (CASA) ratio reached 50.5 per cent at the end of 2021, setting another record for Việt Nam’s banking sector. Techcombank also reported a capital adequacy ratio (CAR) of 15 per cent, a non-performing loans ratio (NPL) of 0.7 per cent, and a loan loss coverage ratio (LLC) of 162.9 per cent, reflecting the bank’s prudent approach to risk-management.

Techcombank’s investments in data and digital technology, coupled with its commitment to delivering the best service possible to customers, enabled Techcombank to achieve another year of robust financial performance in 2021, despite the challenging conditions. In 2021, the bank generated VNĐ37.1 trillion in total operating income (TOI), up 35.4 per cent year-on-year (YoY), driven by strong growth in both interest income (NII) and service fee income (NFI).

Shareholders approved the retention of all earnings to fund the investments in digital, data, and talent and support the bank’s growth trajectory, as set out in the 2021-25 strategy. The 2022 performance targets confirmed that the bank is well-positioned to capitalise on economic recovery as Việt Nam emerges from the pandemic.

In 2022, before-tax profit is guided to reach VNĐ27.0 trillion, up 16.2 per cent from 2021. The bank’s total credit is projected to increase 15 per cent year-on-year to VNĐ446.6 trillion, or higher, in line with the final quota granted by the State Bank of Việt Nam. Deposits growth will be managed in accordance with actual credit growth as the bank pursues optimisation of asset liability management (ALM). Techcombank plans to keep NPL below 1.5 per cent.

The bank reported that it will increase the charter capital to VNĐ35.2 trillion, an increase of 0.18 per cent in conjunction with the planned issuance of 6.3 million ESOP shares.

Responding to a shareholder's question as Techcombank has not paid dividends to shareholders for several years, Chairman of the Board of Directors Hồ Hùng Anh said the bank's steadfast vision is long-term, ensuring shareholders’ shareholders and sustainable development. Retaining capital helps Techcombank have the resources to exploit business opportunities in the market with a high yield, which is better than paying dividends in the short term. In the long term, the value that Techcombank collects still belongs to shareholders.

He said it is not necessary to pay dividends by shares at this time. In 2018 Techcombank paid dividends up to 80 per cent.

“The bank’s value remains the same, the stock dividend will be diluted. Many people think that the stock price will increase after the dividend, but that is not the case, the share price at that time was decreased three times. Even, shareholders also had to pay 5 per cent of their personal income when they receive stock dividends. I think that's not beneficial for the bank and shareholders," Anh added.

Regarding bond investment and real estate lending, he said that Prime Minister Phạm Minh Chính has made it clear that the Government aims to develop a healthy capital market. In fact, the regulator is not restricting the capital market but is cleaning up and some of the negative problems that have happened recently are in the minority. Therefore, developing the capital market is the appropriate strategy that Techcombank has chosen.

When investing in bonds, Techcombank must appraise it as a medium and long-term loan, and of course, it will include a business plan, money source, and ability to repay. This is also an opportunity for the bank to help investors and businesses invest in good bonds.

The bank has not had any problems with real estate loans with almost zero bad debt in the past five years. Its recent dispatch to suspend real estate lending is only temporary.

The chairman added that in recent years Techcombank has lent to real estate projects with reputable investors. The bank also focuses on lending to the group of homebuyers, minimising the lending of land or potentially speculative types that do not bring surplus value. VNS