VIB upbeat after core business breakthroughs

The commercial bank’s assessment is substantiated in its third quarter 2020 financial report.

The bank says it continues to invest in technology, branch networks and people, and has increased its staff strength by more than 1,500 in the first nine months of the year.

VIB has recorded high business growth and presented a strong balance sheet in its latest financial report. Photo courtesy of VIB.

In the third quarter, VIB earned profit before tax (PBT) of VND1,668 billion, an increase of 30 percent compared to the previous quarter and 52 percent higher year-on-year. In the first nine months, total revenue reached VND7,854 billion, up 34 percent; and PBT reached VND4,025 billion, 38 percent higher than same period last year.

Its income from various fees reached VND1,637 billion, accounting for 21 percent of the total revenue. The operating expense ratio (OER) stabilized at 40 percent. Provisional expenses increased by 27 percent year-over-year. The bank’s Return on equity ratio (ROE) was 28.9 percent, among the highest in the banking industry.

As of September 30, 2020, total asset value was over VND213 trillion. Its lending of over VND151 trillion was up 14.2 percent year-over-year, three times the industry average.

Impressively, the bank’s Non-performing loan (NPL) ratio dropped to below the 2 percent level. With strict and flexible risk management, the bank has maintained prudential ratios and safety ratios, as well as a capital adequacy ratio (CAR) of Basel II of over 9.5 percent, well over the minimum 8 percent stipulated by the State Bank of Vietnam.

Its loan to deposit ratio was 77 percent, against a ceiling limit of 85 percent; and the ratio of short-term funds for medium and long-term loans was 32 percent, against a 40 percent ceiling.

Retail leader in Vietnam

VIB’s transformation over the past four years has made it a leading retail bank in the market in many segments:

- Retail credit reached VND126,000 billion as of September 30, 2020, accounting for 85 percent of total credit, more than 95 percent of them secured loans. The two main products of retail credit, home loans and car loans, made up 80 percent of the loan portfolio. VIB maintains the top market share in car loans in Vietnam. Its retail bad debt balance is low at just 1 percent over the past four years.

VIB has steadfastly maintained its strategy of being leading credit card trends in the country, with Vietnam’s first modern-tech application and outstanding card feature. It is a top three bank with the highest card spending as also the bank with the highest growth rate in credit card issuance in Vietnam.

- Life Insurance: VIB continues to be No. 1 in the banking industry in terms of Bancassurance sales.

- Retail staff has grown in size, efficiency and per capita income. In the past nine months, the retail banking division has recruited nearly 1,500 staff to meet the strong demand of customers using VIB products and services.

- Retail revenue in the first nine months of the year topped VND5,700 billion, up 41 percent over the same period in 2019.

Riding the digital wave

With a clear vision of "being the most innovative and customer-centric bank in Vietnam," VIB has always invested seriously in the digital wave of change. For many years, it has maintained its position as one of the leading banks keeping up with the trend of digital banking services with special emphasis on mobile phone platforms.

VIB is the only bank in Vietnam that has won a customer experience award for four consecutive years and Digital Bank of the Year award for three consecutive years from The Asset magazine.

It has launched a new version of the MyVIB app and officially applied e-KYC in issuing e-banking accounts for customers, allowing registration and transaction on the phone in just over a minute.

Most recently, VIB became the first and only bank in Vietnam to date to successfully apply Big Data and AI technology to optimize its credit card issuance process. This technology is initially applied to the Online Plus credit cards for online shopping with up to 6 percent cash back for online shopping and card transaction fraud insurance worth up to VND105 million a year. Accordingly, users can register for the Online Plus credit card with their computer or phone and receive credit card limit approval within 15-30 minutes if all criteria are met, without going to a bank branch and providing proof of income. This technology helps the bank shorten the time for issuing a card at just 1/500 of the average time taken in the market.

These are only initial activities in the bank's strategy to ride the strong digital transformation wave in the banking industry and tap early into the cashless trend in Vietnam.

HOSE listing, dividend

On October 5, a resolution cancelling admission to trading on the UPCOM was duly passed at a shareholder meeting. Accordingly, VIB will transfer nearly one billion shares to the Ho Chi Minh Stock Exchange next month.

Previously, the bank had obtained the central bank’s approval to offer bonus shares at the rate of 20 percent to existing shareholders so as to increase its charter capital to over VND11,094 billion.