As of now, NCB is the first credit institution to complete the approval procedures for the restructuring plan (PACCL) built according to the “Scheme for restructuring the system of credit institutions associated with handling bad debts in the 2021-2025 period” under Decision 689/QD-TTg of the Prime Minister and the guidance of the SBV.
Aggressive bank restructuring according to the roadmap
It is known that the PACCL was built by NCB in collaboration with Ernst & Young Vietnam Co., Ltd. (E&Y) – a leading reputable consulting firm in the field of bank restructuring – to conduct an independent, objective, and comprehensive assessment of the bank’s status, proactively set goals, and propose comprehensive solutions for restructuring the bank. Together with KPMG, a highly experienced and reputable consulting partner in the market, they evaluated the internal control system, developed a roadmap to perfect the internal control system in line with NCB’s development orientation in the following years.
NCB’s PACCL comprehensively presents the bank’s operational status from all aspects, based on which it sets out overall and comprehensive goals and solutions to fundamentally address existing issues and improve the bank’s performance. This ensures NCB’s healthy, safe, and sustainable development. The plan was reviewed by the SBV on February 7, 2024, and approved by the competent authority in June this year.
NCB’s representative said that the bank has urgently and aggressively implemented the re-classification of assets according to the approved restructuring plan (PACCL). After completing the increase in charter capital to more than VND 11,800 billion as expected in Q4/2024, the bank will continue to implement the next step in the approved restructuring roadmap in accordance with regulations, gradually achieving the goal of efficient and sustainable operations.
Also, according to the approved PACCL, NCB will increase capital by VND 23,500 billion within five years. Thus, the bank’s charter capital is expected to reach over VND 29,000 billion by 2028. At the same time, the bank will complete the handling of stagnant assets and finish the PACCL by 2029, turning NCB into one of the most reputable, healthy, and efficient banks in the market, providing the best financial services and solutions.
The bank’s action is positively evaluated for its transparency, which will help it find well-founded and suitable solutions to fundamentally resolve existing problems, comprehensively improve the bank’s performance, and enhance its operational efficiency. This is also the main reason why the bank’s bad debt ratio continued to increase as of June 30, 2024, besides the negative impact of economic difficulties on customers’ financial health and repayment ability, and the decline in market liquidity, which has made it challenging to dispose of secured assets through transfers or auctions.
According to NCB, embarking on a comprehensive restructuring journey with an approved comprehensive solution and clear roadmap, under the supervision of the SBV and relevant authorities, amid a challenging economic context, reflects the bank’s tremendous effort and strong commitment to its partners, customers, and shareholders. NCB is determined to become a healthy, safe, and sustainably developing bank. The bank also assures the continuity of its operations, with all safety indicators strictly complying with the SBV’s regulations. Customers’ assets and transactions are guaranteed to be secure, and their value will continually increase.
Positive business results in the first half of 2024
According to the consolidated business results report for Q2 and the first six months of 2024 released by NCB, thanks to the aggressive transformation of infrastructure, technology solutions, product and service quality, and human resources, NCB has achieved positive results and maintained safe and stable operations.
Specifically, as of the first half of 2024, NCB’s total operating income reached over VND 720 billion, up 18.1% compared to the same period in 2023. Service income reached over VND 49.6 billion, an increase of more than 303% over the same period in 2023. The bank’s securities business continued to be a bright spot, with a profit of over VND 122.2 billion in the first six months of 2024.
Customer confidence in NCB has been steadily growing, reflected in the continuous increase in customer deposits over the past year. As of June 30, 2024, customer deposits increased by 11.1% compared to the end of 2023, equivalent to an increase of nearly VND 8,563 billion. Current and savings accounts (CASA) also increased by more than VND 483 billion compared to the end of 2023. Loans to customers as of June 30, 2024, reached VND 64,198 billion, up 16% compared to December 31, 2023.
As of June 30, 2024, NCB’s total assets reached VND 103,312 billion, up 7.3% from the end of 2023. The liquidity reserve ratio reached 13.84%, ensuring compliance with the SBV’s regulations. The bank’s total pre-tax profit was VND 7.2 billion. However, due to unfavorable exchange rate fluctuations, income from foreign exchange trading decreased compared to the same period in 2023. At the Annual General Meeting of Shareholders in 2024, the bank set a target of VND 105,892 billion in total assets for 2024.
It is known that NCB has identified 13 professional investors registered to purchase private placement shares to increase its charter capital and is expediting the process, determined to complete the capital increase plan approved at the Annual General Meeting of Shareholders in April this year.
After the successful increase in charter capital to over VND 11,800 billion, NCB will not only possess and maintain a good “liquidity buffer” but also strengthen its financial resources to comprehensively restructure the bank and implement breakthrough initiatives toward new strategic goals.
In parallel with the aggressive implementation of the PACCL, NCB has been vigorously executing its new strategy and digital transformation project, utilizing all resources since the beginning of 2024. Up to now, NCB has continuously digitized customer experiences. The NCB iziMobile application is one of the most popular digital banking applications on the market, offering superior experiences. NCB is also one of the first banks to deploy biometric authentication features, ensuring a smooth experience in line with SBV regulations before July 1.
In April 2024, NCB signed a cooperation agreement to deploy Cloud Computing and Data Lake Platform solutions based on Google Cloud with two leading technology partners, CMC Telecom and LUMIQ, becoming one of the first banks in Vietnam to use the most modern data architecture and platform in the market. On July 10, NCB officially signed a cooperation agreement to deploy a Customer Relationship Management (CRM) platform with Zoho Corporation, a leading global technology partner, marking another important milestone in the bank’s digitization and comprehensive transformation journey.
By the end of 2024 – early 2025, the bank is expected to launch the first hybrid digital estate management solution in Vietnam, which will be superior and unprecedented in the market.
NCB has also continuously strengthened its senior leadership team to enhance its governance capabilities. Recently, the bank officially appointed Mr. Nguyen Viet Hoi as Deputy General Director in charge of the Southern region.
Mr. Nguyen Viet Hoi, born in 1983, holds a Master’s degree in Finance and Banking from the University of Economics and Law, Vietnam National University Ho Chi Minh City (UEL – VNUHCM). He completed the training program for senior bank management officials organized by the State Bank of Vietnam and the Swiss Federal Economic Office and has nearly 20 years of experience in the finance and banking industry, holding important management positions at Nam A Commercial Joint Stock Bank.
In the context of economic difficulties negatively affecting the financial health of enterprises in most business areas, NCB’s strong and determined moves demonstrate its commitment and proactive approach, promising robust development in the future.
