Despite the economy’s weak capital absorption, banks, notably OCB, have made significant efforts to implement solutions to enhance businesses’ access to capital and promote credit growth. According to financial reports, OCB’s credit growth as of June 30, 2024, reached 6.3%, higher than the industry average. By gradually shifting its customer structure, improving competitiveness, accelerating customer service, and focusing on the small and medium-sized enterprise (SME) segment, OCB has offered numerous practical financial programs and preferential fixed-interest rates. As a result, credit to the SME customer group increased by nearly 18%.
In addition to supporting interest rates and exchange rates, OCB is also focusing on digitizing financial products and services to enhance convenience and reduce transaction time for corporate customers.
As of the second quarter of 2024, the bank’s market 1 mobilization slightly decreased to a level close to the end of 2023 as the bank proactively balanced its capital sources, thereby optimizing funding costs.
Total net revenue increased by 2.4% year-on-year to VND 4,559 billion, with net interest income rising by nearly 9%. This indicates that the core business maintained stable growth thanks to the “fruits” of the digital transformation strategy. In May 2024, OCB officially launched the new generation of OCB OMNI digital banking, the most modern platform today, integrating all the features that meet the optimal needs of Vietnamese consumers for speed and convenience. This has attracted a large number of customers to switch to online transactions. According to cumulative results for the first six months of 2024, OCB OMNI recorded a 76% increase in transaction volume, a 52% rise in non-term deposits (Casa), and a 53% increase in term deposits (Esaving). In the card business segment, transaction value grew by 27%, and net revenue increased by 32%.
Although net interest income did not increase significantly, OCB expanded its scale compared to the previous year by proactively supporting interest rates and fees through programs accompanying customers in line with the Government’s and SBV’s general policies.
New OCB OMNI Digital Banking: Convenient and Secure
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OCB’s net revenue from non-interest activities decreased by over 24%, mainly due to a reduction in government bond trading activities influenced by the market. However, the bank was extremely flexible and took advantage of the sharp fluctuations in exchange rates, which improved net revenue from foreign currency trading by nearly 101% year-on-year.
Additionally, net revenue from non-interest services decreased by 27.9% year-on-year to VND 270 billion. This was mainly due to OCB’s proactive support for long-standing large corporate customers by reducing fees for financial products provided by OCB and encouraging customers to use digital payment solutions such as OCB Propay, saving up to 80% of time and operating costs for enterprises. This has somewhat helped businesses reduce cost pressures and focus on development and operations. Moreover, it aligns with the bank’s sustainable development orientation.
According to the report, in the first six months, increased provisioning expenses and operating costs led to a total profit of VND 2,113 billion, a decrease of 17.5% compared to the same period in 2023. Sharing on this matter, OCB’s leadership stated: “Enterprises and individuals are still facing many difficulties, leading to high non-performing loans for the entire banking system. Therefore, to increase buffers and ensure the bank’s operations amid a volatile market with many unpredictable variables, OCB has increased provisioning expenses and reassessed the loan portfolio with a cautious approach. In addition, we have focused on expanding our network, developing human resources, and enhancing our technology infrastructure. While this may impact the bank’s profitability in the current period, it will create a solid foundation for its long-term sustainable development.”
It is known that in 2023, OCB opened 10 new branches/transaction offices. In 2024, with the approval of the SBV, the bank plans to open 17 new branches/transaction offices, increasing its presence to 176 locations in 48 provinces and cities nationwide. The bank’s personnel increased by 12% in the first six months, and employee benefits and income also improved, rising by 15%.
As of June 30, 2024, the bank’s total assets remained stable at the beginning of the year at VND 238,884 billion. OCB also controlled and ensured compliance with the SBV’s regulations regarding capital adequacy ratios and liquidity requirements.
Although non-performing loans increased in the first six months, mainly from individual customers, OCB maintained a low non-performing loan ratio of 2.3%, lower than the SBV’s 3% control level. Proactively providing preferential production and business loans and promoting consumption to support individuals and businesses has been OCB’s top priority for many years. In the current context, with businesses closing and rising unemployment rates, customers’ repayment ability has been affected. Particularly, customers who lost their recovery ability after the impact of COVID-19 and the economic recession have been classified as group 5 debts. However, most non-performing loans are secured by real estate. As the real estate market has not recovered recently, disposing of collateral assets remains challenging. At the same time, the bank wants to support customers in selling these assets at more reasonable prices. With the current positive signs in the real estate market and the government’s support, we believe this will be an opportunity for both the bank and customers to expedite the disposal of collateral assets in the coming time, thereby reducing non-performing loans.
Prioritizing the handling and control of non-performing loans will be one of OCB’s critical objectives in the future. The SBV’s issuance of Circular 06, extending the implementation period of the policies in Circular 02 on debt restructuring and maintaining the debt group until December 31, 2024, will help ease customers’ repayment pressure and provide better recovery conditions. As a result, the bank will also reduce non-performing loan pressure and provisioning expenses. In addition, OCB will continue to build and improve its debt management and early warning system to effectively control and support customers, as emphasized by the bank’s leadership.
The year 2024 is considered crucial in OCB’s development strategy for the 2021-2025 period. Therefore, in the last months of the year, the bank will focus on developing individual customers in the middle and high-end segments with “tailor-made” products suitable for their specific needs. OCB will maximize resources, optimize operating processes, prioritize business support, and accelerate transaction processing. Additionally, the bank will implement new and effective policies to enhance credit quality, accelerate non-performing loan handling, and promote digital transformation. “In the first six months, market factors and proactive policies to accompany customers, along with increased technology and personnel investment costs, have led to results for the second quarter and the first six months that did not meet expectations. However, with a stable, transparent, and sustainable growth target, a clear strategy, and a specific action plan, I am confident that the bank will achieve better results in the last six months,” said Mr. Pham Hong Hai, CEO of OCB.
Bamboo Capital (BCG) surpasses 4,000 billion VND in revenue, reduces debt by 5,500 billion VND by 2023
The amount of debt to be paid has been reduced by more than 5,498 billion VND as the Group has actively settled all borrowings in order to lessen the cost of interest and ensure financial stability for the business.
Viglacera Reports First-Ever Loss
Viglacera, the construction equipment giant, reported a net loss of 48 billion VND in Q4/2023, due to declining revenues and high maintenance costs. This marks the first time the company has reported a loss since its inception.
Cen Land’s annual profits plummet to 2.5 billion VND, with nearly 60% of assets being accounts receivables.
Although the fourth quarter saw a reversal in profits, declining revenue resulted in Cen Land’s net profit for the entire year of 2023 only reaching 2.5 billion VND. It is worth mentioning that nearly 60% of the company’s assets consist of receivables from partners, with a total value of approximately 4,100 billion VND.
Vinamilk: Impressive nearly 20% growth in Q4/2023 export revenue
Vinamilk has announced its financial report for Q4 2023, recording a consolidated total revenue and after-tax profit of VND 15,630 billion and VND 2,351 billion, respectively. This represents an increase of 3.6% and 25.8% compared to the same period last year. For the full year, the consolidated total revenue and after-tax profit reached VND 60,479 billion and VND 9,019 billion, completing 95% of the revenue target and 105% of the profit target.
