On March 6, 2024, Military Commercial Joint Stock Bank (MB, stock code MBB) held a meeting with investors to provide information on its business results and growth prospects for 2024.
Leading the meeting, Mr. Luu Trung Thai, Chairman of the Board of Directors (BOD) of MB, answered many questions from investors.
In response to questions about real estate loans, the classification of loans from Novaland and SunGroup, Mr. Luu Trung Thai provided not only information on the loans of these two companies but also all information about real estate loans at MB at present.
According to Mr. Thai, MB has set an annual credit limit and business for real estate loans, at a controlled level, with a loan-to-value ratio of around 8%. MB focuses on lending to residential projects in major localities with high demand and a focus on affordable price segments, with a large number of customers. At the same time, MB also develops retail customers in these projects.
“Currently, MB is quite cautious with new projects and sets tight limits and credit lines for each project and each locality. MB reaffirms strict control over real estate loans,” said MB’s Chairman.
Regarding the debts of Novaland and its subsidiaries, MB currently classifies them as group 1 debts. Last year, MB recovered nearly 50% of Novaland’s debts. The recovery prospects for these groups are relatively optimistic.
Regarding the debts of SunGroup and related companies, they are also classified as group 1 debts. MB focuses on their strong projects, including tourism projects, with cash flows.
Mr. Luu Trung Thai also assessed that the most difficult period for real estate companies was the 3rd quarter of last year, but at this point, the bank trusts that the difficulties are over.
Sharing more about MB’s debt structure, according to Ms. Pham Thi Trung Ha, bad loans account for only over 1% of total loans. The restructuring of loans at MB has also been carried out very well and strictly controlled in accordance with the regulations of the State Bank of Vietnam. In 2023, the bad debts of the whole industry increased, including MB. This issue involves many customer groups, including individual customers and SMEs, distributed in many areas rather than concentrated in one group. “We have been associated with bad debts on CIC. MB’s bad debt control is still very good, MB’s self-classification is very low, but it is associated with bad debts at other banks, leading to an increase in bad debts,” said Ms. Ha.
In terms of bad debt coverage, MB’s view is quite cautious and also complies with regulations, the bad debt coverage ratio in 2024 will be at least equal to that in 2023 and above 100%.
Mr. Luu Trung Thai added that reducing bad debt coverage is difficult to avoid. In 2023, the bad debts of the whole banking industry were high and had to be provisioned. A high provisioning nature will erode the bank’s profits. In 2024, MB will maintain a bad debt coverage ratio of over 100% as it has applied in recent years.
Notably, at the meeting, investors asked about MB’s relationship with Vinfast. The Chairman of MB did not disclose details but affirmed that MB is currently not providing loans to Vinfast.
The Chairman of MB also shared other issues that investors are concerned about. For example, does the sale of preferential shares to investors such as SCIC and Viettel at a low price affect MB? Mr. Luu Trung Thai said that this question has received a lot of attention at the general shareholder meetings and he reaffirmed that MB always focuses on the benefits that shareholders contribute to the bank. Of course, MB will not sell at a low price. As for whether it has an impact or not, he affirmed that it has a positive impact on other shareholders.
Regarding the merger with OceanBank, Mr. Luu Trung Thai said that the bank is also “anxious” and expects to carry it out in the second quarter.
As for selling to foreign investors, MB is not considering it at the moment. As for finding partners for its subsidiaries, MB is still working on it.
Regarding the distribution of profits in 2023, Mr. Luu Trung Thai said that dividends have been distributed, but the specific amount is still being calculated.
MB is expected to hold its annual general meeting of shareholders in 2024 in April (on April 19, 2024) in Hanoi.
