A logo of VIB seen at a building in HCM City. — Photo courtesy of VIB

HÀ NỘI — Vietnam International Bank (VIB) has announced its pre-tax profit at over VNĐ5.64 trillion in the first half of this year, up 12 per cent year-on-year.

In Q2 alone, the bank's pre-tax profit hit a record high of nearly VNĐ2.95 trillion. 

During the first half of this year, the bank's return on equity ratio (ROE) stood at 29 per cent, confirming its presence in the banking industry’s leading group in operational efficiency. 

Impressive revenue growth, effective cost control

Over the past six months, VIB's total operating income hit nearly VNĐ10.3 trillion, 18 per cent higher than the same period last year. Meanwhile, non-interest income reached nearly VNĐ1.59 trillion, contributing 15 per cent to the total revenue.

According to VIB, the main growth driver came from interest income, which increased nearly 21 per cent over the same period to over VNĐ8.7 trillion.

In the context of volatile deposit and lending rates, VIB still maintained a high effective net profit margin (NIM) at 4.7 per cent by optimising its capital and profitable assets.

During the period, digital transformation helped the bank improve its cost-to-income (CIR) ratio at 32 per cent, down two percentage points over the same period. As a result, the bank's pre-provision profit surpassed VNĐ7.17 trillion, up 24 per cent year-on-year.

The bank's return on equity ratio (ROE) stood at 29 per cent, confirming its presence in the banking industry’s leading group in operational efficiency.— Photo courtesy of VIB

Amid challenging market conditions with high interest rates in the first half of 2023 and a sharp increase in retail credit demand as well as bad debts, VIB has increased its risk provision to about VNĐ1.53 trillion, more than double compared to the same period last year.

Cautious about credit growth, improved asset quality

As of June 30, 2023, VIB's total assets topped nearly VNĐ379 trillion, up 10 per cent compared to the beginning of the year.

VIB has implemented a prudent growth strategy and maintained and improved its asset quality. Its outstanding credit balance hit over VNĐ235 trillion, up1 per cent against the year's beginning.

However, in the second quarter, the bank recorded positive business performance with credit growth reaching 2.4 per cent. This helped facilitate a rebound in growth in the first half of this year. 

VIB's outstanding retail loans account for up to 87 per cent of the total loan portfolio, the highest in the industry. Of the total, over 90 per cent of loans are secured by collateral. — Photo courtesy of VIB

VIB is one of the banks with the highest allocation of credit limit in the industry in 2023 as it is ranked among the highest group in 2022 by the State Bank of Việt Nam. This presents both opportunities and challenges for the bank to prove the effectiveness and sustainability of the retail banking model, which it has been developing for several years.

Currently, VIB is one of the banks with the lowest concentration of credit risk in the market. Its outstanding retail loans account for up to 87 per cent of the total loan portfolio, the highest in the industry. Of the total, over 90 per cent of loans are secured by collateral, mainly houses and residential land with full legality.

VIB also posts the lowest investment balance in corporate bonds in the industry, down 45 per cent against the beginning of the year to VNĐ1 trillion or equivalent to 0.4 per cent of the total credit balance. Most bonds are in the fields of manufacturing, trading, and consumption.

Besides credit growth which is on a good recovery, VIB's bad debt ratio temporarily decreased from 2.62 per cent at the end of the first quarter of 2023 to 2.49 per cent at the end of the second quarter. VIB's leaders said that the bank would continue to monitor and review credit activities with a cautious risk appetite in order to reduce the bad debt ratio.

Affirming prestige and capacity

As of June 30, VIB's capital mobilisation topped nearly VNĐ345 trillion, 10 per cent higher than the beginning of the year. Among them, customer deposits rose 3 per cent. In June, VIB signed a new loan agreement with the International Finance Corporation (IFC) worth $100 million, bringing VIB's total credit limit from the IFC, ADB and other international financial institutions to $2 billion.

VIB's total credit limit from the IFC, ADB and other international financial institutions reached $2 billion. — Photo courtesy of VIB

In six months, the bank also ensured safety ratios at an optimal level, in which the Loan-to-Deposit Ratio (LDR) was at 68.16 per cent, compared to the SBV's reguation of under 85 per cent. 

Short-term capital ratio for medium and long-term loans was 24.8 per cent (the upcoming regulation will be adjusted to less than 34 per cent) and the Basel III Net Stable Capital Ratio (NSFR) was about 113.6 per cent (the minimum Basel III regulation is 100 per cent).

VIB has constantly improved its reputation, brand, and transparency when participating in the international financial market thanks to pioneering the compliance and application of international governance standards.

VIB said the successful mobilisation of long-term loans with low costs will continue to support the bank's resources to expand credit for retail customers while optimising profit margins in the coming period and maintaining the highest profitability ratio in the industry.

Paying dividends at 35%, maintaining high capital adequacy ratio

VIB has paid 35 per cent dividends to shareholders, with 15 per cent in cash and 20 per cent in bonus shares, according to the plan approved at the General Meeting of Shareholders in the first quarter.

VIB has paid 35 per cent dividends to shareholders, with 15 per cent in cash and 20 per cent in bonus shares. — Photo courtesy of VIB

Besides, the bank also completed the legal procedures to distribute 7.6 million ESOP bonus shares to employees.

After paying a cash dividend of 15 per cent, the bank's capital adequacy ratio remained high, reaching 12.02 per cent as of June 30. This figure is expected to be maintained at 12-13 per cent in 2023 compared to the SBV's regulation of at least 8 per cent.

A pioneer in technology

With a consistent customer-centric strategy in digitalisation and digital transformation, VIB has taken initiatives in applying many new technologies and developing value chains to bring customers better experiences. Since the beginning of 2023, VIB has rolled out new digital banking products with myriad features to bring convenience to users.

In the future the bank will upgrade and launch more applications for different activities, products, and customer needs, creating a banking ecosystem of digital banking and amenities everywhere. — Photo courtesy of VIB

As a result, the number of transactions made via the bank's digital channels reached 150 million times in the first half of 2023. The number of active users stood at more than 1.5 million, an increase of nearly 40 per cent compared to the beginning of the year.

The bank’s MyVIB Digital Banking App and other technology solutions have received many awards and recognition from prestigious institutions such as The Asset, The Banker, Global Finance Review, Mastercard, Visa card, AWS, and Microsoft.

VIB's leaders said that in the future the bank will upgrade and launch more applications for different activities, products, and customer needs, creating a banking ecosystem of digital banking and amenities everywhere. This not only brings the most diverse and best experiences to customers but also helps optimise operational processes and minimise costs for the bank. — VNS