Techcombank shows resilient performance in Q3 2023 amid recovery indications | The Asian Banker
Sunday, 3 March 2024

Techcombank shows resilient performance in Q3 2023 amid recovery indications

5 min read

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) today announced its financial results for the third quarter, ended 30 September 2023.

Jens Lottner, CEO of Techcombank said: “Techcombank delivered another quarter of resilient performance and continued strong new client acquisition, as the economy showed gradual signs of recovery. Fee income from bonds and bancassurance saw encouraging growth, which helped to drive an increase in total NFI. Our CASA balances also continued to rise for the second consecutive quarter, fortifying our CASA momentum. We continued to outpace the industry in both credit and deposit growth in the first nine months of the year (9M23). All in all, we are on track to deliver our full-year earnings and asset quality targets.”

In the first three quarters, net interest income (NII) declined 14.4% YoY to VND 20.1 trillion ($817 million). In 3Q23, the YoY fall in NII slowed to -3.9% from around -19% in the two preceding quarters. The bank’s cost of funds started to normalise, trending down to 4.7% in 3Q23, from 5.4% in 2Q23, as liquidity in the system continued to ease.

NFI grew 7.6% YoY, on top of an impressive 36.3% YoY growth in 9M22. Specifically, in 3Q23, NFI increased by 12.9% YoY, to VND 2.7 trillion ($109.8 million). Overall, in 9M23:

Cards (VND 1,526 billion ($62 million), up 38.7% YoY): growth in credit card fees was driven by continued high purchase volumes (+29.4% YoY) and instalment volume (+36.2% YoY). Notably, the bank has been working with partners to roll out attractive rewards programmes, being tailored to specific customers’ preferences and taste.

Letters of Credit (LC), remittance and other cash and settlement (VND 3,218 billion ($130.9 million), up 109.4% YoY): growth momentum was sustained as the bank continued to strengthen its range of payment and collection solutions (e.g., QR247 for convenience store, restaurant chains, delivery services, etc.; virtual accounts; and real-time digital signatures), as well as cash and liquidity management solutions (e.g., C-Cash with Kyriba, online CD Bao Loc). All are conveniently available through the bank’s market-leading app for SME and merchant customers.

FX sales (VND 731 billion ($29.7 million), up 19% YoY): the increase was driven by continued robust demand for FX hedging (up 116.2% YoY) while FX flows remained steady (up 1.8% YoY).

Banca fees (VND 458 billion ($18.6 million), down 57.1% YoY): Banca fees positively recovered in 3Q23 with APE increasing 32.1% QoQ. In September, the bank reclaimed the No. 1 market position in terms of Net APE and was among the very few banks to report a MoM increase in APE. This encouraging performance is attributable to the strengthening of Techcombank’s need-based selling strategy, enhanced service capabilities and a widened suite of innovative digital offerings.

IB fees (VND 1,207 billion ($49 million), down 48.1% YoY). IB fees recovered strongly in 3Q23 to VND 607.3 billion ($24.7 million), almost doubling QoQ. Techcom Securities maintained its #4 position in equity brokerage market share but increased its share on the Ho Chi Minh Stock exchange to 6.8%, from 5.5% in 2Q23.

Net income from other activities excluding recoveries reached VND 1.3 trillion ($52.8 million), vs. VND 9.1 billion ($370,219) in net expenses in the same period last year. This was primarily driven by gains on trading and on the sale of the bank’s legacy Hanoi headquarter building in 1Q23.

Recoveries stood at VND 520 billion ($21.1 million), down 52.9% YoY, in line with market-wide headwinds.

In 9M23, operating expenses increased moderately by 5.8% YoY to VND 9.6 trillion ($390.5 million), with cost-to-income ratio (CIR) edging up to 33.2%. Operating expenses in 3Q23 rose 24.7% YoY, mainly driven by higher depreciation and amortisation of fixed assets as the bank continued to investment in digital and cloud technology, and by marketing expenses as the bank accelerated branded-tier offerings for Private, Priority and Inspire customers.

Provision expenses increased 83.7% YoY, following the progression of non-performing loan balances, as expected. The bank’s credit cost remained well-controlled at 0.7%.

Balance sheet
Total assets grew 11.8% YTD to VND 781.3 trillion ($31.7 billion) at 30 September 2023. At the bankonly level, customer credit grew 11.4% YTD to VND 495.4 trillion ($20.1 billion).

On consolidated basis, retail loans started growing again this quarter, primarily thanks to increases in credit cards. Despite pick-ups in disbursement, the primary mortgage market remained relatively muted, compared to pre-2022 levels. However, the bank saw notably stronger demand for secondary mortgages, +11.3% QoQ. Monthly new disbursement in 3Q23 increased c.70% QoQ and was c.4x higher than in 1Q23.

Corporate credit (i.e., loans and bonds to wholesale banking and business banking customers) grew 5.1% QoQ and 33.7% YTD. This reflected continued demand for credit from corporate customers who are willing to borrow and invest ahead of economic recovery.

Customer deposits reached VND 409 trillion ($16.6 billion), up 14.1% YTD and 7.1% QoQ. CASA balance increased for the second consecutive quarter to reach VND 137.6 trillion ($5.59 billion), up 3.2% QoQ, led by an increase in retail CASA (+4.9% QoQ). Term deposits (TD) rose again, reaching VND 271.5 trillion ($11 billion), up 9.2% QoQ and 20.1% YTD. As a result, CASA ratio in 3Q23 lowered to 33.6%. While the interest rate environment has normalised and system liquidity has improved, customers are still gravitating towards term deposits as investment opportunities have been muted across most asset classes, largely due to the prolonged uncertainties in the macroeconomic environment.

Liquidity and capital

The bank’s funding position remained robust, with a regulatory loan-to-deposit ratio (LDR) of 76.7% at 30 September 2023 (vs. 80.4% at 30 June 2023). At 30 September 2023 short-term funding to medium and long-term loan ratio stood at 30.5% (vs.31.6% at 30 June 2023), tracking downwards to 30% by 1 October 2023, as per regulations.

The bank’s capital adequacy ratio (CAR) stood at 15.0% as of 30 September 2023, well above the Basel II, Pillar I minimum requirement of 8.0%.

Asset quality

The bank’s asset quality is within its risk appetite and in line with 3Q23 projections for SM/NPL formation.

Special mention loans (B2) ratio lowered to 1.3% at 30 September 2023 (vs. 2.0% at 30 June 2023). Nearly 30% of B2 was due to CIC-impacts. The bank’s organic B2 ratio lowered to 0.9%, down from 1.4% at 30 June 2023.

The bank’s non-performing loans (NPL) ratio increased to 1.4% from 1.1%. NPL for loans and bonds was 1.3%. The increase was primarily driven by NPL of the retail and SME book, while NPL from large corporates remained at 0%. Despite an increase in NPL, the bank’s credit costs were broadly stable at 0.7% pre-recoveries, and at 0.5% postrecoveries, reflecting the high deductible value of collaterals.


TCBS posted VND 3.7 trillion ($150 million) in operating revenue for 9M23, still down 12.1% YoY. However, 3Q23 saw a commendable rebound, up 57% QoQ and 43.8% YoY. As the corporate bond market started to recover, TCBS was well-poised to capture this positive momentum as an industry leader, recording VND 58.2 trillion ($2.3 billion) in bond issuance volume in 9M23, on par with 2022 levels. Improved liquidity in the stock market, coupled with TCBS’ attractive promotions and reward programmes drove a 30% QoQ rebound in securities brokerage revenue and a 6% QoQ increase in income from margin lending.

In 9M23, TCBS recorded VND 2.1 trillion ($85.4 million) in PBT, down 21.5% from a high base in 9M22. In which, 3Q23 PBT was VND 1.1 trillion ($44.7 million), up 108.2% QoQ and 57.2% YoY.

In 3Q23, TCBS was the first Vietnam securities company to successfully roll out an online digital onboarding feature for corporate customers on its market-leading TCInvest app.

New customers and e-banking transactions

Techcombank ended 3Q23 with 13 million customers, adding around 2.2 million new customers in 9M23 (c.3x increase vs 9M22). Of these, 44.4% were acquired digitally and 42.9% through ecosystem partners.

The number of retail customer transactions through e-banking channels was 577.6 million during 3Q23, up 15.6% QoQ and up 49.4% YoY. Total transaction value amounted to ~VND 2.4 quadrillion ($97.6 billion), up 5.7% QoQ and slightly down 3.2% YoY.

Techcombank ranked first in bancassurance APE in September 2023

Despite the challenging environment facing the whole industry, Techcombank managed to record VND 102 billion ($4.1 million) APE in September, ranking #1 sector-wide. In 3Q23, Techcombank accumulated VND 254 billion ($10.3 million) in APE, among the top three in the industry.

Techcombank has proactively revamped its bancassurance strategy, focusing on “needbased” selling to customers where there is real demand for the product. The bank is also pioneering digital-led protection products, including TechCare+ and An Gia Như Ý. These products can be conveniently purchased directly from the Techcombank Mobile app at competitive prices, while still providing comprehensive protection. The bank is the first in Vietnam to set up a dedicated bancassurance customer service call centre. It has also revamped its iTCBlife platform, integrating it with the bank’s CRM system to optimise lead management, simplifying the sales journey and enhance customers’ experience.

Deepening relationship with customers via AI-powered CRM platform

In January 2023, Techcombank implemented a world-leading customer relationship management (CRM) solution across all of the bank’s business divisions, in partnership with Salesforce. After 10 months, there has been very strong adoption across all lines of business, with 6,200 active users of the CRM system (more than half of the bank’s total employees).

The platform is a critical capability that provides the bank’s sales and service staff with a centralised view of all Customer information (Customer360) and interactions, helping to deepen the banks’ relationships with customers and improving service staff productivity. The system also offers real-time, machine learning-driven, actionable leads and tasks, as well as real-time performance reporting to enable better and faster decision making at all levels of the organisation.

“Thoi khac giao thoi” musical event marked 10 years of Priority

Building on the massive success of the “Dau an vang son” grand musical event in August, Techcombank organised “Thoi khac giao thoi”, to celebrate the 10th anniversary of its legacy “Priority” customer tier and express the bank’s sincerest thanks to valued customers. In addition to enjoying masterful musical performances, an interesting exhibition enabled participants to learn more about Techcombank’s offerings for each branded tier, Private, Priority and Inspire, as well as the bank’s underlying “customer-centricity” strategy. Through the event Techcombank engaged with over 5,000 participants, and it received over 13,500 buzzes on social media, a 2.5x increase compared to “Dau an vang son” in 1Q23.

Bringing Apple Pay to Techcombank customers

In August Techcombank brought its customers Apple Pay, a safer, more secure and private way to pay that helps customers avoid handing their payment card to someone else, touching physical buttons or exchanging cash — and uses the power of iPhone to protect every transaction. Security and privacy are at the core of Apple Pay. Every purchase is secure because it is authenticated with Face ID, Touch ID, or device passcode, as well as a transaction-specific, one-time unique dynamic security code. Apple Pay is easy to set up and customers can also add Techcombank's credit and debit cards from the Techcombank mobile app. Additionally, customers will also be able to apply for a virtual debit card through the Techcombank app and have it instantly issued and added to Apple Pay. Techcombank is currently the #1 bank in Vietnam in Apple Pay users reflecting its commitment to enhance the customer experience and deliver its vision to “Change Banking, Change Lives”.

Grand opening of the two new Techcombank headquarters

Celebrating its 30th anniversary this September, Techcombank unveiled two new green headquarters, situated in the prime locations of 6 Quang Trung, Hoàn Kiếm, Hà Nội and 23 Lê Duẩn, District 1, HCMC. Each building has a unique design that reflects the historic and cultural heritage of its respective city. The new headquarters offer employees an excellent working environment comparable with modern buildings found in other global financial centres. Their design incorporates open workspaces and modern amenities that confirm the bank’s strong commitment to creating the best working conditions for its employees.


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