TECHNOLOGICAL JOINT STOCK BANK OF VIETNAM_TECHCOMBANK

Key figures 2019: (1) Net interest income growth of 28.14%yoy, ranking 5th in sector (18 public banks); non-inerest income/interest income ratio of 47.55%, ranking 3rd; CASA 34.5%, ranking 2nd. (2) lead-ing position in terms of capital aquedacy & profitability: CAR 15.5%, NIM 4.45%, ranking 4th; ROA 2.90%, Ranking 2nd. (3) High assets quali-ty: NPL 1.33%, down from the previous year.

Impressive business results in 2019 provides the basis for TCB to continue promoting strategic segments such as Bancass and retail loans (housing & auto buying). Accordingly, Bancass income will be a highlight in 2020, underpinned by increasing demand for life insurance products (cooperated by TCB & Manulife).

According to our preliminary assessment, credit growth in 2020 is expected to be around 14%-15% as the base case (lower than the average growth of 20% during the 2018-2019 period & higher than the credit growth limit of 13% provided by SBV): declining loans dis-bursement proceeding for retail segment (housing, auto, consumer fi-nance) due to SARS-Cov-2 impact on personal income & real estate pro-ject proceed; large business customers -WB & corporate bond contin-ues contributing ~50% to total credit.

Slower net profit growth inspite of positive bancas income, due to declining net interest income growth corresponding to credit growth while securities investment portfolio might turn negative in 2020. 

The risk assessment view of new CEO (from Sep 2020) may different from the former as during current CEO term, TCB have recorded rela-tively low provision expenses/total credit ratio compared to the peers. The adjustment for provision expenses is difficult to forecast.