ACB – Credit growth beat expectation, strong earnings growth - Earnings Flash
  • 2024-01-26T00:00:00
  • Company Research

ACB released its 2023 results with TOI of VND32.7tn (USD1.6bn; 13.7% YoY) and NPAT of VND16.0tn (USD663mn; +17.2% YoY), achieving 99.4% and 101.3% of our respective full-year forecasts. Q4 2023 NPAT was VND4.0tn (relatively flat QoQ & +39.6% YoY). We do not foresee material changes to our earnings forecasts for ACB, pending a fuller review.

  • 2023 credit growth was 17.9% (vs our full-year forecast of ~13%). We note that ACB does not have any corporate bonds in its credit balance. Q4 2023 credit growth alone was strong at 8.4%, most of it comprised of short-term loans. We attribute this to ACB providing working capital for corporates and household businesses for the year-end season. 
  • 2023 deposit growth was 16.6% YoY. Q4 2023 deposit growth alone was 8.4% which in line with Q4 2024 credit growth despite ACB’s deposit rates were among the lowest compared to private banks. Additionally, ACB’s Q4 2023 CASA was 22.0% (relatively flat YoY & +1.4ppts QoQ) thanks to a series of deposit rate cuts in H2 2023. 
  • 2023 NIM dropped 40 bps YoY to 3.86% vs our full-year forecast of 4.10. For Q4 2023 NIM alone, it dropped 21 bps QoQ despite an improvement in the CASA ratio, which could have been due to (i) credit being disbursed late in the quarter and (ii) a higher proportion of corporate and short-term loans.
  • 2023 NOII was VND7.8tn (+48.1% YoY), completing 104% of our full-year forecast thanks to (1) the strong gain in trading and investment securities at VND2.8tn VND compared to a VND367mn loss in 2022 that outweighed (2) a weak bancassurance fees income.
  • 2023 OPEX was well-controlled with CIR achieved 33.2% (-7.1 ppts YoY).
  • ACB’s asset quality remained intact QoQ. The NPL ratio of gross-up for write-off rate equaled 1.57% vs our full-year forecast of 1.50%. Meanwhile, the Group 2 loan ratio continued to decrease by 16 bps QoQ to 0.66%.
  • ACB credit costs in 2023 were 0.40% (vs 0.02% in 2022), and the Q4 2023 LLR was 89.2% (relatively flat QoQ). We believe ACB 2023 credit costs were among the lowest in our coverage universe. 

 

ACB’s consolidated 2023 results

VND bn

2022

2023

YoY

Q4 2022

Q4 2023

YoY

NII

23,534

24,960

6.1%

6,454

6,290

-2.6%

Non-interest income

5,257

7,787

48.1%

1,472

2,089

41.9%

OPEX

(11,605)

(10,874)

-6.3%

(4,064)

(3,013)

-25.9%

PPOP

17,185

21,872

27.3%

3,862

5,365

38.9%

Provision expenses

(71)

(1,804)

2447.8%

(251)

(322)

28.4%

NPAT-MI

13,688

16,045

17.2%

2,871

4,006

39.6%

 

 

 

 

 

 

 

Loan growth**

14.3%

17.9%

3.6 ppts

2.8%

8.4%

5.6 ppts

Deposit growth**

9.0%

16.6%

7.6 ppts

5.6%

8.4%

2.8 ppts

 

 

 

 

 

 

 

NIM

4.26%

3.86%

-40 bps

4.55%

3.77%

-78 bps

Interest-earning asset yield

7.37%

8.10%

73 bps

8.39%

7.50%

-89 bps

Cost of funds

3.46%

4.76%

130 bps

4.32%

4.21%

-11 bps

CASA ratio*

22.3%

22.0%

-0.3 ppts

22.3%

22.0%

-0.3 ppts

CASA ratio plus term deposits in FX

23.5%

23.0%

-0.5 ppts

23.5%

23.0%

-0.5 ppts

CIR

40.3%

33.2%

-7.1 ppts

51.3%

36.0%

-15.3 ppts

 

 

 

 

 

 

 

NPLs / Gross loans

0.74%

1.22%

48 bps

0.74%

1.22%

48 bps

Group 2 loans / Gross loans

0.57%

0.66%

9 bps

0.57%

0.66%

9 bps

Accrued interest / IEAs

0.69%

0.61%

-8 bps

0.69%

0.61%

-8 bps

Source: ACB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q4 2022 and Q4 2023 loan and deposit growth is QoQ growth; 2022 and 2023 loan and deposit growth is YoY growth.

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