Vietnam International Bank (UPCoM: VIB) announced its financial statements of the first 9 months of 2018, with positive business results shown in key indicators such as asset growth, profit from core business.
Profit before tax grows 176%
According to the nine-month financial statement, VIB reported profit before tax of VND 1,720 billion, up 176% year-on-year (YoY), equal to 86% of its full year target. The revenue increased by 48% YoY, in which interest income and non-interest income up 50% and 37%, respectively; the latter accounted for 16% of total revenue and continued upward trend. The cost-to-income ratio (CIR) significantly dropped from 57% in 2017 to 48%. Provision expense in 9 months was lower than YoY in the context that VIB no longer has bad debts in VAMC. Therefore, the return on equity ratio (ROE) reached 19.4%.
The total asset of the bank reached over VND 132,500 billion, up 8% year-to-date; lending and deposits reached VND 95,200 billion and VND 89,200 billion, up 13.1% and 14.8% year-to-date, respectively. Non-performing loan ratio (NPL) remained at 2.5%.
VIB ranks among biggest retail banks
VIB’s strategic transformation activities in the last two years have strongly focused on Retail Banking business unit. Retail Banking business continued to contribute significantly to VIB’s growth. Lending reached 67,400 billion, up 58% year-on-year, helping VIB become one of the biggest retail banking in the market. VIB continued to maintain the first position in auto-loans taking 25% share of total market. With integrated insurance distribution model, VIB rank top 3 in Bancassurance sales in Vietnam, increasing by 202% YoY. Multi-channel credit card development model combining with digital bank, branch network, direct sales channel and telesales channel helped credit card grow strongly, in which number of credit cards increased by 84% YoY and total credit card spending of Q3/2018 went up by 214% YoY. The positive growth in both size and quality has made VIB’s retail revenue in the first 9 months of 2018 rise 92% YoY.
Multi-channel credit card development model combining with digital bank, branch network, direct sales channel and telesales channel helped credit card grow strongly | Source: VIB
Effective risk management, no bad debts at VAMC & ready for Basel II
In addition to positive business result, VIB has always maintained the best safety ratios among banking industry. According to Moody’s report issued on Aug 2018, Moody’s has upgraded the long-term local and foreign currency deposit and issuer ratings of VIB from B2 to B1. VIB’s safety ratios have been always strong and complied with regulations set by Government agencies and partners. VIB’s capital adequacy ratio (CAR) reached 12.4%. Ratio of short-term deposits used for long-term loans stood at 38.2 %, lower than permitted maximum limit of 45%.
In July 2018, VIB was recognized by the State Bank of Viet Nam and VAMC as one of five banks to re-purchase all bad debts that they sold to VAMC. Three years ago, SBV selected 10 commercial banks to pilot Basel II standards and set the deadline of 2020 for the banks to meet the standards, only VIB and Vietcombank are ready to apply this. VIB’s CAR under Basel II is above 9.5% and VIB is waiting for the SBV’s approval to operate Basel II from January 1, 2019.