Vietnam Technological and Commercial Joint Stock Bank (TCB) Q2 2024 earnings summary

Executive summary

• Achieved record total operating income (TOI) of VND 25.7 trillion in 1H24, up 37.9% year-over-year, with all key revenue lines contributing strongly.

• Profit before tax (PBT) reached VND 15.6 trillion in 1H24, up 38.6% year-over-year, maintaining a market-leading cost-income ratio (CIR) of 28%.

• Return on assets (ROA) held steady at 2.6% (LTM), and capital adequacy ratio (CAR) improved to 14.5% post-cash dividend.

• CASA ratio stood at 37.4%, with balances at an all-time high above VND 180 trillion; management expects recovery above 40% by year-end.

• NPL ratio increased slightly to 1.28% but remained within target, with improved special mention loans supporting stabilization.

Financial highlights

• Net interest income (NII) for 1H24 was VND 18.0 trillion, up 40.2% year-over-year; 2Q24 saw a record VND 9.5 trillion, up 50.6%.

• Net fee income (NFI) grew 32% year-over-year to VND 5.8 trillion, with investment banking and banca fees surging.

• OPEX rose 38% in Q2, but CIR improved to 28% in 1H24 from 32.3% in 1H23.

• Provision expenses more than doubled year-over-year, with cost of risk (LTM) at 1.1% and loan loss coverage at 101%.

• Total assets reached VND 908.3 trillion, up 24% year-over-year; customer deposits up 26.2% to VND 481.9 trillion.

Outlook and guidance

• Full-year PBT guidance maintained, with expectation to exceed it; caution against simply doubling H1 results for full-year estimate.

• NIM expected to moderate but remain above 4% for FY24; CIR targeted at lower end of 30-35% range.

• Credit growth to align with central bank quota (currently 16%), with balanced demand between corporate and retail customers.

• CASA ratio anticipated to improve in H2/4Q24 due to seasonal effects and new customer acquisition.

• Continued focus on digital and AI-driven solutions to drive customer engagement and growth.