- 2024-01-31T00:00:00
- Company Research
HDB released 2023 consolidated results with PBT of VND13.0tn (USD533mn; +26.8% YoY), achieving 110% of our FY2023 and tracking ahead of our expectations mainly due to higher-than-expected NII. This implies Q4 2023 PBT of VND4.4tn (+94.7% YoY; +39.3% QoQ). We see potential upside to our current earnings forecasts, pending a more extensive review.
- The parent bank’s 2023 credit growth was 34.2%. This credit increase derives from (1) loan growth of 32.5% and (2) a 33.4% increase in the corporate bond balance from a low base in Q4 2022. As of 2023, corporate bonds accounted for 3.0% of HDB’s total credit exposure. We observe that strong 2023 loan growth was mainly driven by credit to wholesale and retail, household loans, and real estate business. Additionally, credit to real estate business accounted for 17.9% of the parent bank’s 2023 loan book (vs 8.5% in 2022).
- According to our estimation, HDS’s 2023 loan book increased 7.0% QoQ and decreased 4.5% YoY to VND16.1tn (USD659mn) — with its loan book contributing ~4.7% to the consolidated loan book.
- 2023 consolidated deposit growth of 71.8% was the highest in our coverage and driven by retail customer deposits. The bank stated that customer acquisition via online channels experienced robust growth in 2023.
- 2023 NIM was 4.83%, which was higher than our full-year forecast of 4.63%. Q4 2023 NIM increased 160 bps QoQ from a low base to a record high of 6.00% despite strong deposit growth, which we attribute mainly to (1) funding costs lowering faster than the IEA yield, (2) the lagged positive impact on interest income from strong credit growth in late Q3 2023, and (2) the improvement in HDS’s performance.
- 2023 NOII of VND4.2tn completed 89% of our full-year forecast and implies Q4 2023 NOII of VND785bn (-16.2% YoY & -32.8% QoQ). Q4 2023 NOII trailed our expectation mainly due to weaker-than-expected pure NFI and gains from trading securities.
- 2023 consolidated CIR improved 4.7 ppts YoY to 34.6% vs our full-year forecast of 35.5%.
- Q4 2023 consolidated NPL ratio improved 47 bps QoQ to 1.79%, in which we estimate that the parent bank’s 2023 NPL ratio was 1.51% (-45 bps QoQ) and HDS’s NPL ratio was 7.62% (-29 bps QoQ). However, the Q4 2023 consolidated Group 2 loans level remained high at 5.24% (+20 bps QoQ).
- 2023 credit cost was 1.2% (flat YoY), and 2023 consolidated LLR was 65.8% (vs 70.4% and 54.2% in 2022 and Q3 2023, respectively).
- 2023 CAR of 12.6% was higher than that of peers’ average level.
Figure 1: HDB’s consolidated 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 18,012 | 22,184 | 23.2% | 4,932 | 7,473 | 51.5% |
Non-interest income | 3,956 | 4,230 | 6.9% | 937 | 785 | -16.2% |
OPEX | (8,631) | (9,129) | 5.8% | (2,671) | (2,630) | -1.5% |
PPOP | 13,336 | 17,284 | 29.6% | 3,198 | 5,628 | 76.0% |
Provision expenses | (3,068) | (4,268) | 39.1% | (946) | (1,242) | 31.4% |
NPAT-MI | 7,750 | 10,071 | 30.0% | 1,736 | 3,344 | 92.6% |
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Loan growth** | 29.8% | 30.1% | 0.3 ppts | 7.0% | 17.7% | 10.7 ppts |
Deposit growth** | 17.7% | 71.8% | 54.1 ppts | 3.9% | 8.5% | 4.6 ppts |
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NIM | 4.98% | 4.83% | -16 bps | 5.33% | 6.00% | 68 bps |
Interest-earning asset yield | 9.22% | 11.45% | 223 bps | 10.55% | 12.50% | 194 bps |
Cost of funds | 4.36% | 6.75% | 239 bps | 5.39% | 6.57% | 118 bps |
CASA ratio* | 10.6% | 11.1% | 0.4 ppts | 10.6% | 11.1% | 0.4 ppts |
CASA ratio plus term deposits in FX | 11.1% | 11.6% | 0.5 ppts | 11.1% | 11.6% | 0.5 ppts |
CIR | 39.3% | 34.6% | -4.7 ppts | 45.5% | 31.9% | -13.7 ppts |
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NPLs / Gross loans | 1.67% | 1.79% | 12 bps | 1.67% | 1.79% | 12 bps |
Group 2 loans / Gross loans | 2.80% | 5.24% | 244 bps | 2.80% | 5.24% | 244 bps |
Accrued interest / IEAs | 1.17% | 1.11% | -7 bps | 1.17% | 1.11% | -7 bps |
Source: HDB, 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.
Figure 2: HDB’s standalone 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 13,381 | 17,305 | 29.3% | 3,764 | 6,237 | 65.7% |
Non-interest income | 3,268 | 3,556 | 8.8% | 669 | 526 | -21.5% |
OPEX | (6,476) | (6,834) | 5.5% | (2,118) | (2,059) | -2.8% |
PPOP | 10,173 | 14,026 | 37.9% | 2,315 | 4,704 | 103.2% |
Provision expenses | (698) | (1,290) | 84.8% | (220) | (577) | 163.0% |
NPAT-MI | 7,649 | 10,186 | 33.2% | 1,675 | 3,241 | 93.5% |
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Loan growth** | 30.1% | 32.5% | 2.4 ppts | 7.5% | 18.3% | 10.8 ppts |
Deposit growth** | 17.7% | 71.8% | 54.1 ppts | 3.9% | 8.5% | 4.6 ppts |
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NIM | 3.81% | 3.86% | 5 bps | 4.20% | 5.13% | 93 bps |
Interest-earning asset yield | 8.05% | 10.50% | 244 bps | 9.47% | 11.60% | 213 bps |
Cost of funds | 4.32% | 6.71% | 238 bps | 5.38% | 6.50% | 112 bps |
CASA ratio* | 10.6% | 11.1% | 0.5 ppts | 10.6% | 11.1% | 0.5 ppts |
CASA ratio plus term deposits in FX | 11.1% | 11.2% | 0.1 ppts | 11.1% | 11.2% | 0.1 ppts |
CIR | 38.9% | 32.8% | -6.1 ppts | 47.8% | 30.4% | -17.3 ppts |
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NPLs / Gross loans | 1.30% | 1.51% | 21 bps | 1.30% | 1.51% | 21 bps |
Group 2 loans / Gross loans | 2.32% | 5.05% | 273 bps | 2.32% | 5.05% | 273 bps |
Accrued interest / IEAs | 1.13% | 1.09% | -4 bps | 1.13% | 1.19% | 6 bps |
Source: HDB, 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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