- 2024-04-27T00:00:00
- Company Research
VIB released its Q1 2024 results with PBT of VND2.5tn (USD100mn; -7% YoY), achieving 21% of our 2024F forecast. Overall, the surge in credit costs and the increase in CIR pressured on YoY earnings growth. However, Q1 2024 NOII was robust due to a strong recovery from written-off bad debts and fee income. VIB’s Q1 2024 earnings were broadly in line with our expectations.
- Q1 2024 credit growth was 0.4% YoY vs our full-year forecast of 16.0% YoY. As of 2023, 85% of VIB’s lending portfolio was retail (vs 90% in 2022). Additionally, corporate bonds accounted for only 0.2% of VIB’s credit exposure and were issued by manufacturing and services companies. The bank also stated that its 2024 credit quota is more than 16% and management expects 2024F credit growth of more than 20% if receiving an additional credit quota. VIB stated that it observed some signals of recovery in retail credit demand, especially in auto lending and secondary mortgages.
- Q1 2024 deposit balances decreased 1.0% QoQ due to a decrease in corporate deposits. Additionally, the Q1 2024 CASA ratio was flat QoQ.
- Q1 2024 NIM contracted by 46 bps QoQ to 3.97% vs our full-year forecast of 4.54% amid slow credit growth and an uptick in bad debt metrics. At the analyst meeting, management stated it expects to control NIM to be relatively flat at its current level.
- Q1 2024 NOII was VND1.3tn (+105% YoY), completing 24% of our full-year forecast. Q1 2024 recovery from written-off bad debts increased 4x YoY to VND210bn vs management’s full-year guidance of VND1tn-VND1.5tn. Fee income from settlement services and bancassurance modestly recovered YoY from a low base. VIB stated that both the number of cards issued and total spending by card improved YoY.
- Q1 2024 CIR was 35.2% (+3.4 ppts YoY) amid a strong YoY increase in the employee expenses, operating expenses for management, and investment in fixed assets. VIB stated that it opened 11 new branches and increased its number of employees by 20% last year.
- Both NPL ratio and Group 2 loans level increased QoQ. The Q1 2024 NPL ratio increased 45bps QoQ to 3.60% vs our full-year forecast of 2.94%. Mortgages were the main contributor to NPLs. In addition, the Group 2 loan ratio inched up by 8 bps QoQ and remained high at 5.65% in Q4 2023. Restructured loans under Circular 02 over gross loans was 0.3%.
- Q1 2024 provision expenses surged 42% YoY from a high base and completes 19% of our full-year forecast. Q1 2024 annualized write-off rate was 0.63% (vs 1.36% in 2023). In addition, VIB’s LLR edged down 1.2 ppts QoQ to 49.8% in Q1 2024 (+11.8 ppts YoY).
- Q1 2024 CAR was 11.8% and short-term funding to medium and long-term lending was 25% (vs the regulated cap at 30%).
VIB’s consolidated Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY |
NII | 4,304 | 4,036 | -6.2% |
Non-interest income | 625 | 1,283 | 105.1% |
OPEX | (1,568) | (1,871) | 19.4% |
PPOP | 3,362 | 3,447 | 2.5% |
Provision expenses | (668) | (945) | 41.5% |
NPAT-MI | 2,155 | 2,001 | -7.1% |
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Loan growth** | -1.2% | 0.5% | 1.7 ppts |
Deposit growth** | -0.4% | -1.0% | -0.6 ppts |
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NIM | 5.02% | 3.97% | -105 bps |
Interest-earning asset yield | 10.60% | 7.55% | -305 bps |
Cost of funds | 6.17% | 4.02% | -216 bps |
CASA ratio* | 12.9% | 13.4% | 0.4 ppts |
CASA ratio plus term deposits in FX | 15.6% | 17.0% | 1.4 ppts |
CIR | 31.8% | 35.2% | 3.4 ppts |
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NPLs / Gross loans | 3.64% | 3.60% | -4 bps |
Group 2 loans / Gross loans | 5.43% | 5.65% | 22 bps |
Accrued interest / IEAs | 0.92% | 0.73% | -19 bps |
Source: VIB, 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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