On March 6, 2024, Military Commercial Joint Stock Bank (MB, stock code MBB) held an Investors Conference to inform about business results and growth drivers in 2024.
Banking industry 2024: welcoming many growth drivers
Opening the event, Chief Economist of MB Bank, Mr. Dam Nhan Duc, assessed the growth drivers of the banking industry in 2024, including: economic recovery; Vietnam is in the golden population period; credit growth is high compared to GDP (usually more than double), especially retail credit is always higher than the credit growth of the whole industry. In addition, digital payments have increased sharply, averaging about 30%, but transactions through digital channels have grown strongly. Along with Vietnam's credit/GDP ratio being lower than that of countries such as Thailand, Singapore, etc., these are growth drivers for banks in general, including MB, especially in the retail and digital segments.
2023 highest profit ever
In 2023, MB will maintain a stable growth rate, its member companies will grow sustainably and maintain their market share. The group's total profit will be more than VND 26.3 trillion, the highest level ever. In terms of asset quality, if viewed by quarter, MB has overcome the most difficult period; bad debts are all well provisioned.
In addition, MB has shifted and expanded retail well, currently leading digital transformation and having the largest digital channel transaction turnover; CASA (the proportion of non-term deposits in total deposits) has grown sustainably over the years and is at the top of the market.
In 2023, according to the consolidated financial report, MB achieved a profit of more than VND 26.3 trillion, an increase of 16% over the previous year - the highest level ever. MB's total assets also increased by 30% compared to the beginning of the year, to nearly VND 944,954 billion. MB also took full advantage of the credit room approved by the State Bank, the bank's own credit growth increased by 28.2%.
However, MB's total bad debt as of December 31, 2023 was nearly VND9,805 billion, up 95% compared to the beginning of the year, mainly due to an increase in group 4 debt (doubtful debt). Therefore, the ratio of bad debt to total outstanding debt increased from 1.09% at the beginning of the year to 1.6%. However, all bad debts have good provisions. MB's bad debt coverage ratio (credit reserve fund/bad debt) in 2023 reached nearly 116%.
In addition, MB also shifted and expanded retail, the CASA ratio (the proportion of demand deposits in total deposits) grew steadily over the years and is at the top of the market, reaching nearly 40.1%.
Expected profit in 2024 is 28.8 trillion VND
Mr. Luu Hoai Son, Director of Planning & Marketing Department of MB Bank, with a credit growth rate of 29.2% in 2023, MB is one of the banks with the highest credit growth rate in the market. In 2024, MB was assigned by the State Bank to set a credit growth rate of about 16%.
MB expects higher credit growth than the assigned 16% and on the basis of growth like the last quarter, MB expects profit to reach more than 28.8 trillion VND. "However, we expect that with MB's active participation in the restructuring process of weak credit institutions, the bank will be able to allocate higher credit room," Mr. Son said, adding that with a credit growth rate of 16%, in a cautious scenario, with macroeconomic conditions similar to 2023, MB's profit growth in 2024 will be about 10%, with pre-tax profit estimated at 28,800 billion VND.
MB's growth drivers in 2024 and the following years, MB expects to rely on three major growth drivers: retail, digital transformation and corporate synergy.
MB Chairman: In the next 5 years, MB will focus on digital transformation to attract customers and do business on digital platforms, determining that business on digital platforms accounts for more than 50% of revenue.
MB Chairman of the Board of Directors, Mr. Luu Trung Thai shared that MB aims to conquer 30 million customers before the 30th anniversary of MB (November 4, 1994 - November 4, 2024). MB Bank conducts digital transformation based on only two key points: Customer Attraction and Platform Business. "In 2024 and the next 5-year orientation, MB will continue to focus on this unwavering orientation" - MB Chairman affirmed.
MB Chairman of the Board of Directors, Mr. Luu Trung Thai shared at the Investor Conference of Military Commercial Joint Stock Bank on March 6 : " MB Bank conducts digital transformation based on only two key points: attracting customers and platform business. In 2024 and the next 5-year orientation, MB will continue to focus on this unwavering orientation". In addition, MB determined that digital platforms will account for about 50% - 60% of the bank's revenue in the near future .
In addition, MB determined that digital platforms will account for about 50-60% of the bank's revenue in the near future.
According to information at the event, MB's digital transaction service capacity is currently equivalent to that of top banks in Asia, with 97% of transaction volume conducted via digital channels. MB's digital transaction volume in 2023 will reach 3.6 billion transactions, an increase of 80% compared to 2022.
MB limits real estate business loans at 8%
Regarding an important issue that investors are interested in, which is the bank's real estate lending credit ratio, the MB Chairman said that the bank has established policies and an annual real estate business lending limit of 8%.
“We focus on residential real estate projects in large provinces/cities with high demand; focus on the segment with reasonable prices and high demand from people. In parallel with project lending, MB develops retail customers in these projects. At the present time, we are very cautious with new projects, especially projects that do not follow the strategy as I just mentioned,” said Mr. Luu Trung Thai.
In addition to the advantages, MB also identified certain difficulties and challenges. The first is credit management. Currently, MB has implemented a multi-layered credit risk management model. In addition, the bank has also transformed MB's business model towards ESG to ensure sustainable development. "Currently, MB has the largest green loan balance in the market," said the MB Chairman.
In addition, MB Bank will also focus on transforming towards sustainable development and developing green credit.
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