- 2024-01-30T00:00:00
- Company Research
STB released its 2023 results with TOI of VND26.2tn (USD1.1bn; +0.1% YoY) and bottom-line net profit of VND7.7tn (USD319mn; +53.1% YoY), fulfilling 92% and 96% of our respective FY2023 forecasts. STB’s top-line growth was lower than our expectation due to the lack of an upfront banca fee and low recovery income from written-off bad debts, in our view. However, bottom line growth was broadly in line with our projection due to lower-than-expected provision expenses. STB’s Q4 2023 NPAT was VND2.3tn (+38.2% QoQ; +29.0% YoY). We see potential downside risks to our earnings forecasts for STB, pending a more extensive review.
- 2023 loan growth was 10.1% YoY, which was lower than the system-wide credit growth of 13.7% YoY. Q4 2023 loan growth alone was 2.3% QoQ. We note that STB did not have any corporate bond balance as of Q4 2023.
- 2023 customer deposit growth was at 12.3% YoY vs our full-year forecast of 15.0% YoY. In Q4 2023, STB’s CASA ratio increased 1.3 ppts QoQ but decreased 0.6 ppts YoY to 18.6%.
- 2023 NIM rose 40 bps YoY from a low base to 3.91%, which was in line with our full-year forecast of 3.92%. Q4 2023 NIM increased 41 bps QoQ to 3.79% mainly due to lower COF QoQ that we attribute partly to the positive impact from improving the CASA ratio and/or the deposit balance rolling over with lower deposit rates.
- 2023 NOII was VND4.1tn (-54.4% YoY), fulfilling 64% of our full-year forecast. We believe STB did not book an upfront banca fee as per our expectation and the recovery income from written-off bad debts was lower than our anticipation.
- 2023 CIR increased 7.4 ppts YoY to 49.2% vs our full-year forecast of 45.8% due to an 18.0% YoY increase in OPEX that outweighed a 0.1% YoY increase in TOI.
- Asset quality deteriorated QoQ as the NPL ratio increased by 7 bps to 2.28% in Q4 2023 vs our full-year forecast of 1.80%. STB recorded minimal write-offs in Q4 2023. The 2023 write-off rate over gross loans was 0.08% vs our full-year forecast of 0.50%. The Q4 2023 Group 2 loan ratio slightly increased by 2 bps QoQ to 0.73%.
- 2023 credit cost was 0.76% (vs 2.02% in 2022). In addition, STB’s LLR was 69% in Q4 2023 (+5 ppts QoQ; -62 ppts YoY).
- STB still has a net VAMC balance of VND1.8tn as of Q4 2023. Our estimation suggests that in Q4 2023, STB settled VND4.1tn of VAMC and reversed ~VND550bn of provision expenses for VAMC. In 2023, STB settled VND5.1tn of VAMC and booked VND1.5tn of provision expenses for VAMC.
Figure 1: STB’s consolidated 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 17,147 | 22,072 | 28.7% | 6,043 | 5,633 | -6.8% |
Non-interest income | 8,994 | 4,101 | -54.4% | 1,789 | 1,075 | -39.9% |
OPEX | (10,921) | (12,890) | 18.0% | (2,602) | (3,410) | 31.0% |
PPOP | 15,221 | 13,283 | -12.7% | 5,231 | 3,299 | -36.9% |
Provision expenses | (8,882) | (3,688) | -58.5% | (3,331) | (544) | -83.7% |
NPAT-MI | 5,041 | 7,719 | 53.1% | 1,751 | 2,259 | 29.0% |
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Loan growth** | 13.1% | 10.1% | -3.0 ppts | 4.2% | 2.3% | -1.9 ppts |
Deposit growth** | 6.4% | 12.3% | 5.9 ppts | -0.7% | 0.6% | 1.3 ppts |
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NIM | 3.51% | 3.91% | 40 bps | 4.71% | 3.79% | -92 bps |
Interest-earning asset yield | 7.65% | 9.92% | 227 bps | 9.38% | 9.22% | -16 bps |
Cost of funds | 4.16% | 6.23% | 207 bps | 4.74% | 5.64% | 90 bps |
CASA ratio* | 19.2% | 18.6% | -0.6 ppts | 19.2% | 18.6% | -0.6 ppts |
CASA ratio plus term deposits in FX | 21.1% | 20.2% | -0.9 ppts | 21.1% | 20.2% | -0.9 ppts |
CIR | 41.8% | 49.2% | 7.4 ppts | 33.2% | 50.8% | 17.6 ppts |
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NPLs / Gross loans | 0.98% | 2.28% | 130.0 bps | 0.98% | 2.28% | 130.0 bps |
Group 2 loans / Gross loans | 1.25% | 0.73% | -52.0 bps | 1.25% | 0.73% | -52.0 bps |
Accrued interest / IEAs | 0.97% | 0.94% | -0.1 ppts | 0.97% | 0.94% | -0.1 ppts |
Source: STB, 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: Total estimated STB non-performing assets (NPAs)*
VND bn | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 |
Total NPAs* | 11,174 | 11,141 | 12,636 | 14,276 | 12,814 |
NPLs | 4,299 | 5,341 | 8,226 | 10,388 | 10,984 |
VAMC | 21,515 | 21,515 | 20,606 | 20,578 | 16,433 |
Provisions | (14,639) | (15,715) | (16,196) | (16,690) | (14,603) |
Net VAMC | 6,875 | 5,800 | 4,410 | 3,888 | 1,830 |
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Total Assets (TAs) | 591,908 | 596,694 | 622,178 | 651,288 | 674,390 |
NPAs / TAs | 1.9% | 1.9% | 2.0% | 2.2% | 1.9% |
Source: STB, Vietcap. (*) Quarterly estimated non-performing assets are not yet included in legacy receivables due to the lack of specific breakdown. As of Q2 2023, net legacy receivables were VND1.5tn, per our calculation.
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