- 2024-01-31T00:00:00
- Company Research
VCB released its 2023 results with TOI of VND67.7tn (USD2.8bn; -0.5% YoY) and NPAT-MI of VND33.0tn (USD1.4bn; +10.5% YoY), fulfilling 92% and 96% of our respective FY2023 forecasts. Q4 2023 NPAT-MI was VND9.4tn (+28.7% QoQ; -5.8% YoY). Overall, VCB’s results were broadly in line with our expectations as lower-than-expected provision expenses were partly offset by a lower-than-expected NFI. We see no material changes to our earnings forecast for VCB, pending a more extensive review.
- 2023 credit growth was 10.7% YoY, with gross loans increasing 10.9% YoY while the corporate bond book decreased 9.2% YoY and accounted for 0.8% of credit balance. Q4 2023 credit growth alone was 6.7% QoQ.
- 2023 customer deposit growth was 12.2% YoY vs our full-year forecast of 11.0% YoY. In Q4 2023, VCB’s CASA ratio improved better than our expectation, increasing by 3.9 ppts QoQ and 1.3 ppts YoY to 35.2%.
- 2023 NIM decreased 38 bps YoY to 3.00%, which fell behind our full-year forecast of 3.11%. Q4 2023 NIM decreased 7 bps QoQ, which we attribute mainly to loans being disbursed at the latter end of the quarter and/or continued pressure from support packages to customers.
- 2023 NOII was VND14.1tn (-4.9% YoY), completing 92% of our full-year forecast. The drop in NOII was mainly due to a 15.5% YoY decrease in pure NFI, which was partly offset by (1) VND124bn of net gains from trading and investment securities vs a net loss of VND34bn in 2022 and (2) a 10.6% YoY increase in net other income. We believe the weaker-than-expected NFI could have been driven by weaker fees from trade finance and/or bancassurance.
- 2023 CIR increased 1.2 ppts YoY to 32.4% vs our full-year forecast of 30.4% due to a 3.1% YoY increase in OPEX and relatively flat TOI.
- Asset quality improved QoQ with the NPL ratio decreasing by 23 bps to 0.98% in Q4 2023 vs our full-year forecast of 1.10%. The 2023 write-off rate was 0.45% vs our full-year forecast of 0.40%. In addition, VCB’s Group 2 loan ratio decreased by 21 bps QoQ and remained below 1% at 0.44%.
- The 2023 credit cost was 0.36% (vs 0.83% in 2022 and our 2023F of 0.65%). VCB booked less provision expenses for gross loans and booked more provision expenses for interbank loans than we anticipated. VCB’s LLR remained high at 230% in Q4 2023 (-40 ppts QoQ; -87 ppts YoY).
VCB’s consolidated 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 53,246 | 53,621 | 0.7% | 14,809 | 12,801 | -13.6% |
Non-interest income | 14,836 | 14,103 | -4.9% | 3,853 | 3,158 | -18.1% |
OPEX | (21,251) | (21,915) | 3.1% | (4,556) | (5,752) | 26.3% |
PPOP | 46,832 | 45,809 | -2.2% | 14,107 | 10,207 | -27.6% |
Provision expenses | (9,464) | (4,565) | -51.8% | (1,679) | 1,487 | -188,6% |
NPAT-MI | 29,899 | 33,033 | 10.5% | 9,935 | 9,355 | -5.8% |
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Loan growth** | 19.2% | 10.9% | -8.3 ppts | 1.3% | 6.8% | 5.5 ppts |
Deposit growth** | 9.5% | 12.2% | 2.7 ppts | 3.9% | 3.5% | -0.4 ppts |
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NIM | 3.38% | 3.00% | -38 bps | 3.50% | 2.89% | -61 bps |
Interest-earning asset yield | 5.60% | 6.04% | 44 bps | 6.03% | 5.67% | -36 bps |
Cost of funds | 2.45% | 3.41% | 96 bps | 2.81% | 3.11% | 30 bps |
CASA ratio* | 33.9% | 35.2% | 1.3 ppts | 33.9% | 35.2% | 1.3 ppts |
CASA ratio plus term deposits in FX | 40.2% | 40.8% | 0.6 ppts | 40.2% | 40.8% | 0.6 ppts |
CIR | 31.2% | 32.4% | 1.2 ppts | 24.4% | 36.0% | 11.6 ppts |
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NPLs / Gross loans | 0.68% | 0.98% | 30 bps | 0.68% | 0.98% | 30 bps |
Group 2 loans / Gross loans | 0.36% | 0.44% | 8 bps | 0.36% | 0.44% | 8 bps |
Accrued interest / IEAs | 0.52% | 0.51% | -1 bps | 0.52% | 0.51% | -1 bps |
Source: VCB, 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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