According to its recently released financial report, Techcombank 's business performance indicators all showed impressive growth in the fourth quarter, resulting in a 17.8% year-on-year increase in total operating income. In addition to a significant increase in the CASA ratio from 33.6% at the end of the third quarter to 39.9% at the end of the fourth quarter, Techcombank also continued to maintain its leading position in terms of capital adequacy ratio (CAR), at 14.4%.
Income from service activities for the whole year of 2023 increased by 9.5% to VND 10.2 trillion. In particular, in the fourth quarter alone, income from service activities increased by 14.2% to VND 3.1 trillion, the best quarterly revenue from service activities in the bank's history. The driving force behind this strong growth in service activities came from a 33.7% increase in card service revenue to VND 2,148 billion last year; an 81.5% increase in revenue from letters of credit (LC), cash, and payments compared to the same period, reaching VND 4,509 billion; and a 9.2% increase in foreign exchange service revenue to nearly VND 996 billion.
In addition, net interest income in the fourth quarter increased by 11.4% compared to the same period last year after declining in the previous three quarters, helping net profit for the whole year reach VND 27.7 trillion, narrowing the decline rate for the whole year 2023 to only 8.6% compared to the previous year.
While improving business efficiency, Techcombank has maintained a strong focus on reducing operating costs, with an annual cost-to-income ratio (CIR) of 33.1%.
Overall, Techcombank recorded pre-tax profit of VND 5.8 trillion in the fourth quarter, a 21.6% increase compared to the same period last year. For the entire year 2023, pre-tax profit reached VND 22.9 trillion, exceeding the target of VND 22 trillion approved by the General Shareholders' Meeting in April 2023. Techcombank's 2023 business results demonstrate its ability to accurately grasp and forecast market developments, along with its capacity to implement its plans effectively.
The CASA ratio has recovered dramatically to nearly 40%.
In 2023, Techcombank's total assets increased by 21.5% to VND 849.5 trillion at the end of the year. Within the bank itself, credit growth was 19.2% year-on-year, reaching VND 530.1 trillion, in line with the credit limit granted by the State Bank of Vietnam.
Customer deposits reached VND 454.7 trillion, a 26.9% increase year-on-year and an 11.2% increase compared to Q3. CASA balances increased for three consecutive quarters, reaching a record high for the bank at VND 181.5 trillion at the end of the year, a strong 37.0% increase compared to Q4 2022 and a 31.9% increase compared to Q3. Consequently, the CASA ratio improved to 39.9%. This growth demonstrates Techcombank's leading transaction banking capabilities, evidenced by the growth rate of transaction volume on digital channels (a 41% year-on-year increase to 2.2 billion transactions, equivalent to 13% of the NAPAS transaction market share) and the world's leading monthly app access rate – over 50 active customer visits. On the other hand, time deposits (TD) reached VND 273.2 trillion, up 20.9% year-on-year and relatively stable quarter-on-quarter, as yields began to become less attractive compared to investment returns and the potential of the real estate, bond, and stock markets.
The Bank's Basel II Capital Adequacy Ratio (CAR) reached 14.4% as of December 31, 2023, maintaining its leading position in the banking industry and significantly exceeding the minimum requirement of 8.0%. Provisioning costs increased by 102.5% year-on-year, reflecting the Bank's proactive approach to provisioning. Credit costs remained well-controlled at 0.8%. The non-performing loan (NPL) ratio at the end of 2023 was only 1.19%, down from 1.4% at the end of Q3. The NPL ratio for both the loan and bond portfolios was 1.12%.
Annual cash dividend of at least 20% of total after-tax profit.
Techcombank closed the fourth quarter of 2023 with over 13.4 million customers, recording 2.6 million new customers for the whole year of 2023, more than double the number of 2022. Of these, 46.8% joined through digital channels and 36.2% through partners in the ecosystem.
After a decade of consistently achieving profit growth of nearly 40% per year, Techcombank has now become the leading private bank in Vietnam, with total pre-tax profits exceeding US$3 billion in the last three years.
Based on sustainable business and profit growth, the Bank has proposed a long-term dividend policy to be presented to the Shareholders' General Meeting in April 2024. The Bank plans to propose a cash dividend payout of at least 20% of total annual after-tax profit – or 4-5% of the Bank's equity at the beginning of the year, equivalent to approximately VND 1,500 per share. With positive business results even amidst a volatile economic environment, the Bank believes that maintaining the aforementioned cash dividend policy, while continuing its above-average business growth and ensuring a Tier 1 capital adequacy ratio of 14-15%, is entirely feasible.
"I believe that the transformation strategy and positive business results in a challenging 2023 once again affirm the bank's inherent strength, while creating a solid foundation for growth in the coming years. This allows the bank to plan a long-term cash dividend strategy for shareholders," said Jens Lottner, CEO of Techcombank.
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