Credit Expansion Drives MSB’s Q1 Performance
MSB’s (Military Commercial Joint Stock Bank) Q1 2024 performance was marked by a 5.6% expansion in credit growth, demonstrating the effectiveness of digital channels and the diversity of loan products tailored to specific customer segments. This aligns with the recovery in real estate, consumer spending, and investment seen in the market. The bank’s total assets reached nearly VND 279,000 billion at the end of Q1.
Customer deposits grew by 4.1% compared to the end of 2023. Notably, leveraging market trends in digitization and the development of product and service packages, the bank’s non-term deposits totaled nearly VND 40,300 billion, a 14.64% increase. This brought the CASA/Total Deposit ratio to 29.21%, an increase of nearly 3 percentage points compared to December 31, 2023. By effectively managing and optimizing its funding sources, MSB can optimize its cost of capital, creating room for reducing lending rates, supporting customers, and stimulating credit demand.
MSB’s total operating income in Q1 reached over VND 3,100 billion, an increase of almost 9% compared to the same period in 2023. Net interest income remained a key growth driver at nearly VND 2,400 billion, a 9.6% increase. Non-interest income accounted for over 24% of total income, driven by the significant growth of foreign exchange trading, which saw a 330% year-over-year increase in net revenue to nearly VND 592 billion.
MSB’s management noted that to maintain its positive growth trajectory, the bank will offer various incentives for import-export businesses, including highly competitive exchange rates and free online international money transfers (including electricity charges). The bank will also expand derivative products offered in the interbank market, enhance currency risk hedging products, and more.
In the services segment, net revenue from service activities also increased by over 11%, primarily due to growth in payment service fees, letters of credit, and foreign exchange services. This growth reflects the bank’s efforts to increase non-interest revenue and diversify income sources.
Strong digitization contributes to MSB’s service revenue growth
Despite the expansion in total assets and total revenue, the bank maintained an efficient net interest margin (NIM) of 3.87%. The bank’s operating costs were well-controlled, leading to a decline in the cost-to-income ratio (CIR) to 33.6% compared to 39.26% at the end of 2023. For the first three months of the year, MSB’s pre-tax profit was over VND 1,530 billion, representing 22.5% of the full-year plan.
Regarding liquidity and capital, the bank’s capital base was managed prudently. As of March 31, 2024, the loan-to-deposit ratio (LDR) was 71.9%, and the ratio of short-term funds to medium- to long-term loans (MTLT) was 28.78%, meeting the requirements of the State Bank of Vietnam. The consolidated capital adequacy ratio (CAR) stood at 12.15% at the end of Q1, well above the regulatory minimum of 8%.
Based on the stability of its balance sheet and asset quality, MSB’s management is confident in maintaining positive business results throughout 2024. The Q1 performance also provides a solid foundation for the bank to fulfill the commitments made to shareholders during the 32nd Annual General Meeting of Shareholders held on April 23.
At the recent annual general meeting, MSB shareholders approved a 30% stock dividend plan, increasing the charter capital to VND 26,000 billion. MSB is one of the banks offering shareholders one of the highest dividend rates from retained earnings as of the end of 2023 after fulfilling its financial obligations.MSB expects to implement this in Q3 2024 upon regulatory approval. With a promising start to the 2024 fiscal year, the bank has also obtained shareholder approval for a plan to pay interim dividends from profits generated in 2024 after the completion of the capital increase to VND 26,000 billion.
