- 2024-01-30T00:00:00
- Company Research
CTG released its 2023 results with TOI of VND70.7tn (USD2.9bn; +10.2% YoY) and NPAT-MI of VND20.0tn (USD826mn; +18.1% YoY), fulfilling 99% and 110% of our respective FY2023 forecasts. Q4 2023 NPAT-MI was VND6.1tn (+58.4% QoQ; +43.1% YoY). Overall, CTG’s results were better than we anticipated mainly due to lower-than-expected provision expenses. We see potential upside to our earnings forecast for CTG, pending a more extensive review.
- 2023 credit growth was 15.5% YoY, with gross loans increasing 15.6% YoY while the corporate bond book decreased 2.4% YoY and accounted for 0.3% of the credit balance. Q4 2023 credit growth alone was 6.2 QoQ%.
- 2023 customer deposit growth was 12.9% YoY vs our full-year forecast of 9.0% YoY. In Q4 2023, CTG’s CASA ratio improved better than our expectation, increasing by 2.5 ppts QoQ and 2.5 ppts YoY to 22.5%.
- 2023 NIM decreased 12 bps YoY to 2.86%, which fell behind our full-year forecast of 2.93%. However, Q4 2023 NIM increased 18 bps QoQ mainly thanks to a drop in the COF, which could have been due to the improving CASA ratio and/or deposit balance rolling over with lower deposit rates, outweighing the drop in the IEA yield.
- 2023 NOII was VND17.6tn (+7.7% YoY), completing 97% of our full-year forecast. Decent NOII growth was mainly driven by (1) a 22.0% YoY increase in pure NFI, (2) 19.5% YoY increase in gains from FX trading, and (3) VND138bn of net gains from trading and investment securities vs a net loss of VND142bn in 2022, which are partly offset by a 12.1% YoY decrease in net other income that could have been due to weaker recovery income from written-off bad debts.
- 2023 CIR decreased 1.0 ppts YoY to 28.9% vs our full-year forecast of 30.0%, thanks to a 10.2% YoY increase in TOI that outweighed a 6.5% YoY increase in OPEX.
- Asset quality remained intact QoQ. Q4 2023 NPL ratio grossed up write-off rate increased 30 bps QoQ to 2.94% vs our forecast for YE2023 NPL ratio grossed up write-off rate of 2.95%. However, CTG’s Group 2 loan ratio improved better than our anticipation, which decreased by 82 bps QoQ to 1.55% vs our forecast of 2.10%.
- Q4 2023 annualized credit costs of 1.21% were the lowest level since Q2 2021. 2023 credit costs improved to 1.70% from 1.87% in 2022 (vs our full-year forecast 1.88%). CTG’s LLR remained at a high-end of the peer of 167% in Q4 2023 (-5 ppts QoQ; -19 ppts YoY).
CTG’s consolidated 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 47,792 | 53,083 | 11.1% | 12,710 | 14,572 | 14.7% |
Non-interest income | 16,325 | 17,575 | 7.7% | 4,073 | 3,903 | -4.2% |
OPEX | (19,195) | (20,443) | 6.5% | (6,254) | (6,304) | 0.8% |
PPOP | 44,922 | 50,215 | 11.8% | 10,528 | 12,171 | 15.6% |
Provision expenses | (23,791) | (25,115) | 5.6% | (5,160) | (4,473) | -13.3% |
NPAT-MI | 16,924 | 19,992 | 18.1% | 4,276 | 6,119 | 43.1% |
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Loan growth** | 12.8% | 15.6% | 2.8 ppts | 2.4% | 6.3% | 3.9 ppts |
Deposit growth** | 7.5% | 12.9% | 5.4 ppts | 5.0% | 7.7% | 2.7 ppts |
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NIM | 2.98% | 2.86% | -12 bps | 2.98% | 3.05% | 7 bps |
Interest-earning asset yield | 6.52% | 7.14% | 62 bps | 7.12% | 6.84% | -28 bps |
Cost of funds | 3.72% | 4.51% | 79 bps | 4.33% | 4.05% | -28 bps |
CASA ratio* | 20.0% | 22.5% | 2.5 ppts | 20.0% | 22.5% | 2.5 ppts |
CASA ratio plus term deposits in FX | 22.7% | 25.1% | 2.4 ppts | 22.7% | 25.1% | 2.4 ppts |
CIR | 29.9% | 28.9% | -1.0 ppts | 37.3% | 34.1% | -3.2 ppts |
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NPLs / Gross loans | 1.24% | 1.13% | -11 bps | 1.24% | 1.13% | -11 bps |
Group 2 loans / Gross loans | 2.35% | 1.55% | -80 bps | 2.35% | 1.55% | -80 bps |
Accrued interest / IEAs | 0.72% | 0.74% | 2 bps | 0.72% | 0.74% | 2 bps |
Source: CTG, 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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