- 2024-04-27T00:00:00
- Company Research
CTG released its Q1 2024 results with TOI of VND19.1tn (USD762mn; +12% YoY) and PBT of VND6.2tn (USD248mn; +4% YoY), fulfilling 23% and 21% of our respective FY2024 forecasts. Overall, CTG’s Q1 2024 earnings were broadly in line with our forecasts as double-digit TOI growth helped to counteract slightly higher-than-expected provision expenses.
- Q1 2024 credit growth was 2.8% (loan growth of 2.8%; corporate bonds decreased 9.6% QoQ and accounted for 0.3% of the credit balance).
- Q1 2024 customer deposit growth was 1.2%. The Q1 2024 CASA ratio was roughly flat QoQ at 22.2%.
- Q1 2024 NIM was also flat QoQ at 3.03%, with decreases in both the IEA yield and funding costs. Q1 2024 NII completed 25% of our full-year forecast and was slightly better than our expectation.
- Q1 2024 NOII was VND3.9tn (-11% YoY), completing 17% of our full-year forecast and tracked behind our expectation due to weaker-than-expected pure fee income and recovery income from written-off bad debts. However, a 15% YoY increase in gains from FX trading supported NOII.
- Q1 2024 CIR was flat YoY at 25.3% vs our full-year forecast of 29.0%. We expect some seasonal expenses in H2 2024 to increase the full-year CIR.
- Bad debt metrics ticked up QoQ. Q1 2024 NPL ratio increased 22 bps QoQ to 1.35% vs our 2024F of 1.10%. However, CTG’s Group 2 loan ratio was relatively flat at QoQ at 1.59% vs our 2024F forecast of 1.25%. Q1 2024 annualized write-off rate was 1.3% vs our full-year forecast of 1.6%. We expect bad debt metrics to reduce in the coming quarters as (1) the bank will accelerate its write-off rate toward the end of the year and (2) credit growth is set to be stronger in the remainder of 2024.
- Q1 2024 annualized credit costs spiked to 2.13% vs the two-year-low level of 1.21% in Q4 2023. Provision expenses jumped 20% YoY and 80% QoQ from a low base in Q4. It completes 26% of our full-year forecast, and tracks slightly ahead of our expectation. CTG’s Q1 2024 LLR continued to decrease QoQ but remained at the high end compared to peers at 151% (-16 ppts QoQ; -22 ppts YoY).
CTG’s consolidated Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY |
NII | 12,666 | 15,174 | 19.8% |
Non-interest income | 4,352 | 3,893 | -10.6% |
OPEX | (4,314) | (4,807) | 11.4% |
PPOP | 12,704 | 14,259 | 12.2% |
Provision expenses | (6,724) | (8,049) | 19.7% |
NPAT-MI | 4,806 | 4,959 | 3.2% |
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Loan growth** | 4.6% | 2.8% | -1.8 ppts |
Deposit growth** | 1.9% | 1.2% | -0.7 ppts |
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NIM | 2.90% | 3.03% | 13 bps |
Interest-earning asset yield | 7.50% | 6.18% | -132 bps |
Cost of funds | 4.84% | 3.36% | -148 bps |
CASA ratio* | 18.1% | 22.2% | 4.1 ppts |
CASA ratio plus term deposits in FX | 20.9% | 24.6% | 3.7 ppts |
CIR | 25.3% | 25.2% | -0.1 ppts |
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NPLs / Gross loans | 1.28% | 1.35% | 7 bps |
Group 2 loans / Gross loans | 2.67% | 1.59% | -108 bps |
Accrued interest / IEAs | 0.77% | 0.71% | -6 bps |
Source: CTG, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q1 2023 and Q1 2024 loan and deposit growth is QoQ growth.
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