**Techcombank Reports Impressive Q1 Results with 38.7% Growth in Pre-Tax Profit**
**Strong Growth across Business Segments, CIR Ratio Drops to 26.5%**
Vietnam Technological and Commercial Joint Stock Bank (Techcombank) recently announced its consolidated Q1 2024 financial results, with pre-tax profit reaching 7,802 billion VND, a 38.7% increase year-over-year (YoY).
Net interest income (NII) reached 8.5 trillion VND in the first quarter, representing a 30.2% YoY growth, primarily driven by strong credit growth and improved cost of funds. The net interest margin (NIM) hit 4.4%, up from 4.2% in Q4 2023.
Fee income amounted to 2.8 trillion VND, climbing 28.3% YoY. Revenue from investment banking fees exceeded 750 billion VND, more than 2.6 times (164%) higher than the same period last year due to TCBS’s robust performance. Letter of credit (LC), cash management, and payments generated 1,160 billion VND, a 17.1% YoY increase, while card fees reached 498 billion VND, up 9.2% YoY.
However, foreign exchange and insurance income declined slightly compared to the previous year, partly attributed to a high base effect for foreign exchange revenue in Q1 2023 and a subdued insurance market. Nonetheless, Techcombank’s annualized premium equivalent (APE) remained significantly better than the industry average, with a 25% YoY decline, compared to a 50% decline for the overall market.
Other operating income contributed 832 billion VND, excluding provision write-backs, a 72.6% YoY increase, largely driven by gains from securities and foreign exchange trading. Recovery from impaired loans also improved by 20.5% YoY to 144 billion VND.
Techcombank’s operating expenses rose modestly by 3.4% in Q1 to 3.2 trillion VND. The cost-to-income ratio (CIR) significantly declined from 33.8% in Q1 2023 to 26.5%, positioning Techcombank among the banks with the best expense control in the industry, a level once described by its leadership as “unthinkable.”
**Credit Growth of 6.4%, Stable Deposits, CASA Surge**
As of Q1 2024, Techcombank’s total assets increased by 4.3% since the end of 2023 to 885.7 trillion VND. Within the parent bank, credit grew by 6.4% since the beginning of the year to 563.9 trillion VND, in line with the credit limit granted by the State Bank of Vietnam. Notably, Techcombank’s non-real estate lending grew by 38%, reflecting the bank’s efforts to diversify its loan portfolio.
Customer deposits experienced an impressive 18.3% YoY growth and remained stable compared to the beginning of the year, reaching 458 trillion VND. Among these, current account and savings account (CASA) deposits increased by 49.4% YoY and 2% since the end of 2023, raising the CASA ratio to 40.5%.
Currently, only a handful of banks have announced their Q1 results, but Techcombank’s CASA ratio of 40.5% remains unmatched.
Techcombank further increases its CASA ratio to 40.5%, maintaining its leading position
**NPL Ratio Down, Provision Coverage Ratio Up to 106%**
In Q1, thanks to better asset quality, Techcombank’s provisioning costs decreased by approximately 25.9% to 1,211 billion VND. The loan loss provision coverage ratio rose to 106%, from 102% at the end of last year.
Techcombank’s capital position remains robust, with a loan-to-deposit ratio (LDR) of 78.5% at the end of Q1, below the regulatory limit. The short-term funding ratio for medium- and long-term loans stood at 25.1%, well under the 30% cap set by regulations.
The bank’s capital adequacy ratio (CAR) under Basel II declined slightly to 14.2% on March 31, 2024, from 14.4% at the end of 2023, but it exceeded the minimum requirement of 8.0%. The ratio remains within the bank’s target range of 14-15%.
Commenting on the positive Q1 results, Jens Lottner, Techcombank’s CEO, stated that total operating income (TOI)
