CASA shows positive reversal in Techcombank Q2 results

Jens Lottner, CEO of Techcombank, said that the bank delivered steady performance during Q2. IB activities also showed pick-ups in the stock market and bond distribution volumes.

The bank continued to outperform the market in credit and deposit growth, while NPL and CAR stayed at healthy levels.

Techcombank ended H1 with 12.2 million customers, adding around 1.4 million new customers during the period. Of these, 45.3% were acquired digitally and 43.8% through ecosystem partners.

The bank acquired more customers in the first half of the year than it did in the whole of 2022.

"We broke a new record on customer acquisition, with 1.4 million new customers added during the first two quarters, more than all of 2022," Lottner said.

"We also launched a new merchant proposition, extending integrated and customized digital offerings to Vietnamese households and micro-SMEs."

An employee guides a customer through transactions. Photo courtesy of Techcombank

During Q2, the number of retail customer transactions through e-banking channels grew to 499.7 million, up 16.4% from the previous quarter and up 36.4% from the same period last year, while total transaction value amounted to nearly VND2.3 quadrillion, up 6.8% from the previous quarter and down 18.6% from the same period last year.

Given the bank’s balance sheet, total assets grew 17.4% YoY to VND732.5 trillion on June 30.

At the bank’s level, customer credit grew 8.5% YTD to VND482.2 trillion.

Quarter-on-quarter, balances remained broadly stable as Techcombank was constrained by the credit quota granted by the State Bank of Vietnam.

Customer deposits stood at VND381.9 trillion, up 18.8% year-on-year. CASA started a recovery, reaching VND133.4 trillion, up 7.5% quarter to quarter.

Beyond the normalization of interest rates and aggressive customer acquisition strategy, CASA is expected to further benefit from the targeted propositions that are being developed in corporate as well as retail banking.

Credit card fees benefited from growth in purchase volumes, with VND67.4 trillion in Q1, up 28.5% year-on-year, on the back of revamped propositions. The bank also saw high growth in installment volumes, up 52.1% year-on-year, following efforts to make the process more convenient for customers.

In the first half of 2023, operating expenses declined slightly by 3% year-on-year to VND6 trillion, with the cost-to-income ratio standing at 32.3%.

In terms of liquidity and capital, Techcombank’s funding position remained robust, with a regulatory loan to deposit ratio of 80.4% on June 30 and a short-term funding to medium-and long-term loan ratio of 31.6%. The bank is preparing for the new regulatory requirement of 30%, which will be effective on October 1.

Besides, its asset quality is within its risk appetite. The bank’s non-performing loan (NPL) ratio stands at 1.07%, with a healthy coverage ratio of 115.8%. Excluding CIC impact, the bank’s organic NPL ratio remained well-controlled at 0.9%.

The bank continued to invest in digital and cloud technology, driving higher costs for depreciation and amortization of fixed assets (up 74.3% year-on-year) as well as premises and equipment (up 47.3% year-on-year).As Vietnam’s pioneer in providing outstanding digital experiences, the company attracted a substantial number of new customers in Q2, accounting for nearly 8% of the total number of new accounts opened in the market.

Techcombank also launched a new merchant proposition, extending integrated and customized digital offerings to Vietnamese households and micro-SMEs.

The bank was one of the first in the market to launch an instant notification application for multi-cashiers and owners. This solution significantly removes transaction bottlenecks and allows businesses to optimize efficiency.

On the other hand, Techcombank's relentless pursuit of customer-centricity has yielded remarkable results.

Today, more than 90 percent of the bank's retail transactions are conducted digitally, marking an astounding 40 percent surge in new digital customers in 2022.

The bank receives coveted industry accolades such as Best Bank in Vietnam by FinanceAsia and No. 1 Vietnam Best Workplaces (large company category) by Great Place to Work.