Inside an HDBank’s transaction office in HCM City. HDBank reports a pre-tax profit of VNĐ5.018 trillion ($215.45 million), a year-on-year increase of 25.3 per cent, and non-performing loans under 1 per cent in 2019. — Photo courtesy of the bank

HCM CITY — The HCM City Development Joint Stock Commercial Bank (HOSE: HDB) has just released its audited financial statements for 2019, which show pre-tax profit increased by 25.3 per cent to VNĐ5.018 trillion (US$215.45 million), its highest ever.

Its profit after tax was VNĐ4.02 trillion ($172.5 million), a 25.6 per cent rise.

As a result, its return on average assets (ROAA) and return on average equity (ROAE) were 1.8 per cent and 21.6 per cent, sharply higher than in the preceding year and among the highest in the banking industry.

The bank also has good asset quality, with the bad debt ratio of the parent bank being a low 0.98 per cent since HDBank has controlled it well over the years.

HDBank achieved good profit growth thanks to an increase in income from lending and services and effective management of operational costs.

Net interest income was VNĐ9.747 trillion ($418.37 million), up 27.5 per cent, and net income from services was VNĐ626 billion, up 42.8 per cent.

Despite the bank's credit growth in 2019 of only 18 per cent, its net interest income increased strongly. That was thanks to its net profit margin (NIM) going up sharply to 4.8 per cent from 4.2 per cent in 2018, one of the highest rates in the industry.

Regarding earnings from services, according to the audited financial statements, the biggest contributors to the impressive growth are an increase of 54.5 per cent in earnings from insurance services and an increase of 67.9 per cent from payment services.

HDBank executives said income from services still has much room to grow and would continue to enjoy strong growth. The bank is in the process of selecting bancassurance partners to expand in this promising sector. It plans to enhance digital banking services to bring more useful banking products and services as well as effectively exploit its large and diversified customer eco-system comprising over 30 million customers.

The strong growth in the above sources of income enabled HDBank’s total operating income (TOI), for the first time in its history, to reach VNĐ11.388 trillion ($488.57 million), a 20.6 per cent. Provisioning for bad debts was kept under control thanks to having the best asset quality in the industry. The cost to income ratio (CIR) was 44.6 per cent compared to 47 per cent in 2018.

As of December 31 the bank had total consolidated assets of VNĐ229.47 trillion ($9.8 billion) and equity of VNĐ20.38 trillion ($878.8 million), a year-on-year increase of 21.1 per cent.

Its capital adequacy ratio (CAR) improved significantly to 11.2 per cent as against the minimum of 8 per cent set by the State Bank of Vietnam.

Loans outstanding topped VNĐ153 trillion, higher than the industry average, with the parent bank’s outstanding loans being VNĐ140.4 trillion.

Its loan portfolio structure is well balanced, with priority given to effective risk management products such as hi-tech agriculture, green credit, lending to small and medium-sized enterprises, and households businesses.

In 2019, HDBank focused on digital transformation with the launch of Di-HDBank Digital Bank. Its e-banking transaction channel received a major upgrade with a new mobile banking application with a modern and friendly interface, biometric authentication and artificial intelligence and a chatbot to support customers round the clock.

These are major pre-requisites for HDBank in 2020 for its digital transformation.

In 2019, HDBank won some prestigious titles and awards such as the Labour Medal, the Government's Emulation Flag and the Traditional Flag of the HCM City People's Committee, an award for being among the Top 10 Large-Cap Companies with Outstanding Annual Reports at the Vietnam Listed Companies Awards, the award for Top 10 Sustainable Enterprises from the Vietnam Business Council for Sustainable Development, and the “Best Companies to Work for in Asia” award for the second year in a row from HR Asia magazine, a publication for human resource professionals.

Last year, it received the approval from the State Bank of Việt Nam to adopt Basel II standards ahead of schedule.

Besides business activities, HDBank has always paid great attention to community activities. Last year alone, together with the Sponsoring Association for Poor Patients in HCM City, it helped perform free cataract surgeries for 1,110 poor patients, donated 7,400 health insurance cards through the association and the HCM City Fund for the Poor, gave 1,000 scholarships through the National Fund for Vietnamese Children, funded five charity houses across the country, organised annual blood donation activities, and others.

It has organised sports activities, including the HDBank Cup International Open Chess for nine consecutive years.

It sponsored the 2019 National Futsal Championship and Cup. — VNS