A VIB logo on a building in HCM City. — Photo courtesy of the bank

 

Vietnam International Bank (VIB) has announced its business results for the first half of 2024, with total operating income surpassing VNĐ10.35 trillion (over US$409 million), showing a slight increase compared to the same period last year.

 

Deposits and credit growth were recorded at 5 per cent, aligning with the industry average. Pre-tax profit reached VNĐ4.6 trillion (over 55.3 million), corresponding to a return on equity (ROE) of 21 per cent, positioning it among the top in the industry.

 

Focusing on high-quality customers with good collateral and introducing competitive retail products led to a slight decrease in the net interest margin (NIM), although VIB maintained a positive NIM at 4.2 per cent.

 

According to VIB, non-interest income reached nearly VNĐ2.4 trillion, contributing 22 per cent to total revenue. Notably, income from write-off recovery contributed VNĐ500 billion, a 2.7-fold increase year-over-year, while foreign exchange activities added VNĐ330 billion.

 

Fee income grew 9 per cent year-on-year, primarily driven by credit cards and bancassurance. The number of credit cards in circulation surpassed 750,000, with credit card spending hitting a new record of nearly $2.4 billion in H1, up 42 per cent year-over-year.

 

Operating expenses increased by 16 per cent compared to the same period last year, due to investments in personnel, new branches, technology, digital banking, and marketing.

 

VIB said that its cost-to-income ratio (CIR) averaged 32 per cent over the past 12 months, expected to trend down by the end of 2024 as cost optimisation initiatives are implemented.

 

In the first half of the year, VIB continued to proactively increase its provision buffer, with average quarterly risk provisioning of about VNĐ1 trillion, up 36 per cent compared to the first half of 2023 but down 38 per cent compared to the second half of 2023.

 

Higher- than-average deposit growth

 

As of June 30, VIB's total assets exceeded VNĐ431 trillion, marking a 5 per cent increase from the beginning of the year. Deposits grew by 5 per cent, outpacing the banking sector's average of 1.5 per cent.

 

The bank's credit growth as of the end of Q2 topped nearly VNĐ280 trillion, up 5 per cent from the start of the year, across the four key segments: retail, corporate clients, SMEs and financial institutions.

 

VIB said that its credit growth has been recovering, with a 1 per cent increase in Q1 and a 4 per cent rise in Q2, driven by optimising the cost of capital, reducing lending rates and introducing innovative and competitive retail products, supporting growth momentum for the second half of the year.

 

As one of the highest-ranked banks by the State Bank of Vietnam (SBV), VIB has been granted a top lending limit, exceeding 16 per cent for 2024. It currently has one of the highest remaining credit growth capacities in the industry for the second half of the year.

 

 

At a VIB transaction office. — Photo courtesy of the bank

 

Dividend and bonus share payout of 29.5% in 2024

 

In the first half of the year, VIB completed two cash dividend payments totaling 12.5 per cent of the charter capital. Currently, VIB is processing a 17 per cent stock dividend for existing shareholders along with 11 million employee stock ownership plan shares for nearly 2,000 employees in Q3.

 

During the period, VIB held its general meeting of shareholders in 2024, approving amendments to the bank's charter, including setting the maximum foreign ownership limit at 4.99 per cent of charter capital.

 

According to VIB representatives, amidst ongoing market volatility from global macroeconomic and political factors, VIB continues to strive towards its vision of becoming Việt Nam's leading retail bank in terms of quality and scale and a top banking partner for businesses and financial institutions.

 

Dynamic, safe growth and maintaining a prudent risk appetite remain top priorities, along with pioneering the implementation of international standards.

 

Additionally, VIB focuses on developing a modern, advanced digital banking platform with high information security to enhance service capacity and provide the best experience for each customer.

 

 

VIB’s Apple Pay transaction is completed on an iPhone. — Photo courtesy of VIB.

 

Prudent risk management, industry-low concentration risk

 

Amid improving but still weak credit demand, VIB maintains a prudent strategy, balancing growth targets with credit quality and operational efficiency.

 

In addition to positive credit growth compared to the same period last year, VIB’s asset quality has improved, with the non-performing loan (NPL) ratio stable at 2.4 per cent.

 

VIB continues to have one of the lowest credit concentration risks in the market, with retail loans making up over 82 per cent of the total loan portfolio, of which over 90 per cent are secured by real estate with full legal documentation and good liquidity.

 

The bank also has one of the lowest corporate bond investment balances in the industry, accounting for only 0.2 per cent of total credit. All bonds are in the manufacturing, trading, and consumer sectors. For over four years, VIB has had zero credit balance in BOT, renewable energy credit, corporate bond guarantees and real estate bond investments.

 

Notably, VIB has one of the lowest levels of receivables for interest and fees, at around VNĐ2.6 trillion, down 28 per cent from the end of 2023, accounting for only 0.6 per cent of total assets, compared to between 1 and 2 per cent for many banks, with some as high as 3 per cent. This reflects the quality of recognised revenue on the financial statements and VIB's prudent approach to retail credit accounting.

 

Key risk management ratios are at an optimal level, with the Basel II Capital Adequacy Ratio (CAR) at 11.8 per cent, the Loan-to-Deposit Ratio (LDR) at 72 per cent, the short-term capital for medium- and long-term loans ratio at 26 per cent and the Net Stable Funding Ratio (NSFR) according to Basel III at 117 per cent.

 

By consistently leading in compliance and application of international management standards, VIB continuously enhances its reputation, brand and transparency in the domestic and international financial markets. — VNS

 

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