On the afternoon of March 6, 204, Military Commercial Joint Stock Bank (MB, HOSE: MBB) organized a meeting with investors to update the business results and growth momentum for 2024.
Multiple growth drivers for the banking industry in 2024
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Mr. Dam Nhan Duc – Chief Economist of MB assessed that the growth momentum of the banking industry in 2024 includes many factors.
Firstly, the economic recovery. Secondly, Vietnam is in the golden population period and the government will take advantage of this opportunity. In addition, credit growth is high compared to GDP (usually twice as high), especially retail credit is always higher than the overall credit growth.
The digital payment is increasing dramatically, with an average of about 30% but the transactions through digital channels are growing strongly. Along with Vietnam’s credit/GDP ratio, which is lower than countries like Thailand, Singapore, these are growth drivers for the banking sector in general, including MB, especially in the retail and digital banking segments.
According to MB’s Chief Economist, in 2023, the growth momentum of the economy only relies on public investment, but in 2024, the import-export sector’s strong growth will be a clear signal for the economy. Besides, despite a slightly weak consumer demand, it is still good and this factor will support the positive growth of the banking industry compared to 2023.
Profit expectation of 28,800 billion VND in 2024
Mr. Luu Hoai Son – Director of MB’s Planning and Marketing Board stated that in 2024, MB expects a higher credit growth than the 16% set by the State Bank of Vietnam. Based on the growth foundation like the fourth quarter of 2023, MB expects a profit of 28,800 billion VND in 2024.
In 2024 and the following years, MB expects growth based on three major driving forces.
The first driving force comes from retail banking. Currently, MB has more than 26 million customers, and it is expected to increase to 30 million customers in 2024. This is a highly anticipated development in the future.
Retail outstanding loans and outstanding loans for micro SME customers account for 51% of MB’s total loan structure. Currently, the number of customers interacting regularly on the App and BizMB platforms is very high, with about 10-15% of loan transactions that can be converted to digital platforms, and hope to expand in 2024.
Retail banking will help MB’s CASA (Current Account, Savings Account) continue to grow in the future. In the context of 2024 when credit institutions enter a new economic cycle, with a decrease in lending interest rates, the CASA advantage and cost of capital will enable MB to provide customers with loans at reasonable costs while still ensuring high profits in the future.
The second driving force is digital transformation. In recent years, MB has invested heavily in digital transformation, with connections to the customer ecosystem across platforms, providing a good experience for customers. Thanks to digital transformation, the number of transactions has grown rapidly, but operating costs and transaction-related personnel costs remain stable.
The third driving force is the synergy of the financial group. MB’s ecosystem is a financial group with a full range of financial services, including securities, banking, insurance, creating the most comprehensive and largest internal driving force in the banking and financial sector. This has been demonstrated clearly through the growth of each member, for example, the number of MBS customers has increased more than three times in 2 years.
In addition to the advantages, MB also identifies many difficulties and challenges. Firstly, credit risk management. Currently, MB has implemented a multi-tier credit risk management model. In addition, the bank is also transforming MB’s business model towards ESG to ensure sustainable development.
The outstanding loans of Novaland have reduced by nearly 50% and are classified in Group 1
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In response to investors’ questions, Chairman of MB’s Board of Directors – Mr. Luu Trung Thai stated that the outstanding loans of Novaland at MB in 2023 have decreased by nearly 50%. The situation of Novaland’s loans is improving. The procedures for two important projects, Aqua City and Novaworld, are being actively resolved. The legal process for these 2 projects is progressing according to the supported and announced schedule by the Government.
MB’s Chairman stated that the outstanding loans of Novaland and its subsidiaries are still classified as Group 1 because they are still in the normal repayment process and the recovery potential of these projects is relatively optimistic.
The projects with Trung Nam Group, MB’s participation in 3 projects, and these projects have completed on schedule and achieved good prices. These projects have regular debt repayment with no repayment issues.
Regarding the debt of Sun Group, he mentioned that the loans are still classified in Group 1 and the loan projects are the strengths of the Group, relating to tourism, with regular cash flows.
For the overall credit assessment of real estate, MB has provisioned a lending limit for real estate business annually with a ratio of around 8%. MB focuses on residential real estate projects in large cities with high demand, reasonable prices, and a large number of customers. At the same time, MB also develops retail customers for these projects.
Currently, MB is very cautious about new projects, setting strict limits for each locality to ensure quality control of the projects.
Regarding the acquisition of Oceanbank, MB has completed the procedures for submission to the Government and is awaiting the final approval of the State Bank of Vietnam. It is expected that this project will be completed in 2024.
