We attended CTG’s AGM in Hanoi on April 29. The main agenda was to propose (1) 2024 business targets, (2) approve a stock dividend plan, and (3) elect new members to the Board of Directors (BOD) and Board of Supervision (BOS) for the 2019-2024 term. The Q&A section focused on CTG’s business outlook and its assessment of the economic environment.

• 2024 targets include total asset growth of 8%-10% YoY vs our full-year forecast of 12.5% YoY. Guidance on credit growth was not disclosed (our current assumption is 13.0% YoY). CTG’s current credit quota is 14.05% and credit growth as of April 26 was 4.1% with 40% of new disbursements given to priority sectors. In addition, funding growth is targeted to be in accordance with credit growth, the NPL ratio is targeted to be kept below 1.8%, and parent PBT growth is targeted to be in accordance with what is approved by authorities. CTG is working with the SBV for 2024 PBT growth target and believes the bank will exceed the guidance. CTG also has a track record of exceeding its earnings guidance over the last five years. The bank anticipates its 2028 earnings to be triple vs its result in 2023. 

• FY2023 dividend payment plans: to use all retained profit of VND13.9tn (USD563mn) to pay stock dividends. We note that CTG just paid the stock dividend for FY2020 in December 2023. Additionally, the bank has the approval by the State Bank to pay stock dividends for FY2021 and FY2022 but has not executed yet.

•CTG’s BOD for the term 2024-2029 has 11 members including two members representing foreign shareholders and one independent member. CTG’s BOS for the term 2024-2029 will have five members and the bank has just elected three members. 

• 2024-2029 outlook & strategy: GDP growth of around 5.9%-6.4%/year.

+ Asset growth: 9%-10%/year.

+ Credit growth: 9%-10%/year.

+ Funding growth: 9%-10%/year.

+ ROE: 16%-18% (average ROE in 2019-2023 was 16%).

+ NPL ratio <2%.

+ CTG currently focuses on its strategy to expand its market share. 

CTG expects the interest rate to increase from the current low base in the remainder of 2024 due to pressure from the exchange rate and inflation. CTG targets its NIM to continue improving by around 7 bps in the next three quarters. Management stated that credit growth of 14% is achievable in 2024. CTG is one of the two banks partnering with the Ministry of Natural Resources and Environment (MONRE) to finance ESG projects. CTG currently has around USD2bn of credit exposure to ESG projects. MUFG (CTG’s strategic shareholders) will help the bank to arrange up to USD1bn to finance the ESG segment in the future. 

Management is conservative about the improvement in NPL formation in 2024F and plans to increase LLR. The bank has not seen a clear recovery path for the real estate segment at the moment. It believes that affordable real estate projects might see better recovery in late 2024 while high-end and resort real estates will take a longer time to recover.

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