On April 20, Techcombank held its 2024 Annual General Meeting of Shareholders and approved all proposals. The bank unanimously agreed on a business plan with a target of pre-tax profit growth of 18.4% in 2024, reaching approximately VND 27,100 billion.
Speaking about the profit figure, Techcombank’s Chairman of the Board of Directors – Mr. Ho Hung Anh said that the market still faces many challenges in 2024, and the bank has set a rather conservative business plan, although the bank exceeded its targets in 2023.
Notably, at the General Meeting, Techcombank’s Chairman stated that in 2024, the bank will gradually develop and expand into segments that were previously not the bank’s strengths, such as lending to small and medium-sized enterprises (SMEs), unsecured lending, and consumer lending. Techcombank is well-positioned to expand into these segments as the bank has invested heavily in technology and data, which enables the bank to reduce operating costs and manage risk effectively based on customer data and behavior.
Revealing at the general meeting, Techcombank’s CEO, Mr. Jens Lottner, said that the bank’s total technology investment amounts to USD 500 million, and that more than VND 2,000 billion is invested in technology annually. Currently, Techcombank has made impressive progress on its journey to becoming an AI-powered bank, harnessing the power of data to drive business value. Techcombank’s data system can be divided into 100 micro-segments, aiming for “personalization for each customer”; more than 52 million personal financial analyses are provided, increasing the conversion rate for targeted campaigns, and so on.
The CEO of Techcombank added that the bank has been striving to diversify its portfolio in 2023, focusing not only on large customers but also on retail customers such as SMEs and individuals. The bank is also focusing on areas other than real estate, such as tourism and consumption.
Existing strengths of Techcombank, such as the affluent customer segment, lending to the real estate sector, bonds, and so on, continue to be developed. Looking back over the past two years, Techcombank’s Chairman believes that the bank has demonstrated its risk management capabilities, despite the fact that both the real estate and bond sectors have faced numerous difficulties. For example, in the bond advisory segment, Techcombank has not allowed any bonds to become overdue in terms of interest or principal, ensuring safety for customers. Techcombank’s asset quality is among the best, with a current non-performing loan (NPL) ratio of only 1.2%.
At the end of 2023, Techcombank recorded a Current Account Savings Account (CASA) ratio of around 40%, on par with MB, and is leading the system in this ratio. Techcombank’s CASA balance has grown significantly over the past year, especially in the second half of the year.
Techcombank’s CEO recognizes that CASA is a highly competitive area today. As such, in order to improve its position in this race, Techcombank has introduced superior solutions for payments, the “automatic savings” feature, and other focuses different from those of other banks. For example, Techcombank does not focus heavily on the number of customers, but rather on the quality and the percentage of active customers who use Techcombank as their primary transaction bank.
In 2023, Techcombank attracted 2.6 million new customers, more than double the number of new customers attracted in previous years. Techcombank’s partnership with Masan to create the Winlife ecosystem has helped the bank gain approximately 1 million new retail customers, while its digital channel has helped it attract 1.2 million customers. Notably, on average, each customer logs into the bank 50 times per month, leading the way in customer engagement compared to banks around the world.
“I believe that the target of 55% for the CASA ratio is entirely achievable, with new features such as automatic savings. We may achieve this result this year or next year,” said Techcombank’s CEO.
It is understood that “automatic savings” is a feature for new payment accounts that Techcombank launched earlier this year. Accordingly, customers only need to activate the feature, and the money in the payment account will be automatically transferred and accrue interest daily. The standard amount, at VND 10 million in the customer’s payment account, will earn interest at a rate of 0.1% per annum, similar to a regular current account. Amounts of VND 10 million and above will be converted into an automatic savings balance, with a daily yield for customers of up to 2.7% per annum according to the policy of each period.
At the general meeting, shareholders also asked Techcombank’s management about the bank’s decision not to participate in the mandatory transfer of weak banks, while some other large banks have announced that they will participate and have been granted higher credit limits as a result.
Techcombank’s CEO said that the bank’s management and Board of Directors had also discussed this issue, but the final decision was not to participate because accepting a mandatory transfer would require a large outlay of funds to support the weak bank in question. “Currently, Techcombank is only supporting the restructuring of business loans”.
Mr. Jens Lottner affirmed that Techcombank will not fall behind other banks by not participating in mandatory transfers in exchange for more lenient credit “room” mechanisms. Currently, when comparing financial indicators, Techcombank still outperforms the industry as a whole.
Speaking about credit growth, Techcombank’s leader said that the annual growth “room” allocated by the State Bank is based on the operating performance of the previous year and the growth potential of each bank. Techcom
