Vietnam Technological and Commercial Joint Stock Bank (TCB) Q4 2023 earnings summary

Executive summary

• FY23 PBT was VND 22.9tn, down 10.5% YoY but VND 0.9tn, or 4%, above guidance; 4Q23 PBT rose 21.6% YoY to VND 5.8tn.

• 4Q23 TOI rose 17.8% YoY to VND 11.0tn; TOI excluding recoveries rose 17% YoY, NII growth turned positive and CASA rebounded to 39.9%.

• FY23 credit growth reached 19.2%; customer deposits rose 26.9% YoY and new customer additions totaled 2.6mn, bringing the base to 13.4mn.

Financial highlights

• FY23 TOI was VND 40.1tn, down 1.2% YoY; NII fell 8.6% to VND 27.7tn, NFI grew 9.5% and PBT declined 10.5%.

• 4Q23 NII grew 11.4% YoY and NFI rose 14.2% to VND 3.1tn; cards, letters of credit, FX and settlement fees supported fee income.

• FY23 OPEX increased 1.8% to VND 13.3tn; 4Q expenses fell 7.8% YoY. FY23 provision expenses rose 102.5% YoY, while CIR was 33.1%.

Outlook and guidance

• FY24 GDP growth forecast was 6%, supported by FDI, tourism, exports and fiscal measures, including stronger public-investment disbursement.

• A high SBV credit quota is expected; CASA initiatives and deposit rates averaging 70–80 bps lower are expected to support funding costs.

• NIM is expected to remain broadly unchanged as lower funding costs may be offset by soft asset yields; fee growth is expected to return broadly to normal rates.

• CIR target is in the mid-thirties; NPLs are expected to normalize as activity improves, while credit cost may edge lower, partly offset by more unsecured lending.