VNDirect seeks solutions to big problems

Restoring market share and the connectivity problem

The phrase “problem” was mentioned no less than 20 times by the highest-ranking leader of VNDirect Securities Corporation at the recently held 2025 annual general meeting of shareholders. Part of it may stem from speaking habits, but it cannot be denied that 2024 is a period when this securities company faces many challenging problems. One of those problems that VNDirect has not found a solution to is the story of market share.

Despite holding assets of over VND 50,000 billion, and a charter capital scale in the leading group, VNDirect is only in 6th place in the stock and fund certificate brokerage market share rankings on the Ho Chi Minh City Stock Exchange, after many years firmly in the Top 3. Market share from over 7%, decreased to 5.87% in the whole year of 2024.

In the first quarter of 2025, VNDirect moved up one rank, but continued to lose market share to 5.26%. The value of stock transactions for investors in the quarter decreased by nearly 35%. Brokerage revenue in the first quarter of 2025 decreased by 41% compared to the same period. Along with that, the contribution ratio in total revenue from this business segment decreased from 16.5% to 10.7%.

Facing a hacking attack on the Company's technology system was one of the biggest challenges that VNDirect has ever experienced in its 17 years of development. According to the Company's Board of Directors, this incident not only caused a temporary disruption in operations, but also challenged the trust of customers and partners.

Looking back at the Company's path, Ms. Hoang Thuy Nga, former Head of the Board of Supervisors, who has been with VNDirect since its inception (2007), said that the Company had risen to the top thanks to its distinct technological advantages, ahead of the market. VNDirect pioneered products such as web trading in 2009 - 2010, the electronic trading platform in 2013, and later, the early application of eKYC to open accounts during the Covid-19 pandemic. Therefore, according to Ms. Nga, the market share decreased sharply because VNDirect did not launch new products in the context of other securities companies restructuring and launching many competitive campaigns...

However, according to Chairman of the Board of Directors Pham Minh Huong, VNDirect is promoting the application of artificial intelligence (AI) to support work, shorten staff training time as well as use AI in customer behavior positioning, especially when these behaviors change a lot when AI is born.

General Director Nguyen Vu Long also said that the Company will devote resources to reinvesting in technology, applying AI to platforms, and increasing processing speed on the platform. In the long term, this is necessary for institutional customers - a group of customers that are expected to participate more, especially after the Vietnamese stock market is upgraded, welcoming more capital flows from foreign institutional investors.

Talking about the story of market share competition, according to the view of Chairman of the Board of Directors Pham Minh Huong, competition is an inevitable part of business, especially in the financial - securities sector. According to Ms. Huong, since returning to management, market share has not been considered the top priority of this securities company.

Realizing that securities companies in the large banking ecosystem have superior advantages in terms of capital, customer network and ability to integrate financial products, Ms. Huong also emphasized that independence is the core competitive advantage.

The problem that the Company is focusing on solving is market connection, such as connecting with other banking ecosystems or connecting with small consulting centers... Investing in technology and developing breakthrough products is what this company aims for. "Although it may not be in the Top market share, VNDirect will be steadfast in all conditions," said Ms. Huong.

Be cautious in disbursing capital

In 2024, VNDirect will hardly expand the size of margin lending. General Director Nguyen Vu Long also said that after the incidents, the Company now has a more cautious approach, with the number 1 priority being liquidity. In particular, focusing on growing margin lending activities with mass customers, limiting large customers.

Caution is also seen in asset allocation activities. According to the Company's leaders, in addition to the market share problem, another challenge that will continue to arise in 2025 is finding a place to disburse capital. The difficulty in disbursing capital is even greater than that of capital mobilization. According to the VNDirect leaders, not only securities companies, but also the banking industry are looking for good investment opportunities. The world changes, businesses must change.

As for portfolio allocation, with deposit interest rates falling to rock bottom in the first half of 2024, VNDirect proactively reduced the size of deposit contracts and deposit certificates to switch to bond investment to improve profits. However, newly invested corporate bonds are mostly bonds issued by state-owned banks, which are safe and highly liquid, so they do not increase the risk level of the overall financial asset portfolio. Net capital market revenue from financial assets decreased by 31.8% over the same period, but thanks to a sharper decrease in financial costs for capital market activities (54.2%), this segment's profit still grew well.

Deep involvement in previous private bond issuances, such as underwriting activities, has affected business operations in 2024. Increased provisioning expenses are also one of the reasons why the Company missed the full-year profit target, as VNDirect had to record about VND 200 billion in provisioning expenses in 2024. However, this is also a lesson that helps the Company not only participate in investment banking activities at the top.

Source: https://baodautu.vn/vndirect-tim-loi-giai-nhung-bai-toan-lon-d293503.html