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MB aiming for 30 million customers by end of year
At the 2024 AGM of Military Commercial Joint-Stock Bank (MB) in Hanoi on April 19, the bank unveiled ambitious business targets and strategic directions ahead of its 30th anniversary in November.
"Despite ongoing economic challenges, MB is targeting profit growth of 6-8 per cent, aiming to reach a profit of approximately VND30 trillion ($1.25 billion), supported by our substantial customer base of 26.5 million, projected to grow to 30 million by the end of 2024," Anh shared.
Anh credited MB’s large customer base for the bank's low funding costs, noting, "MB has a Current and Savings Account ratio of 40 per cent in 2023, and MB is aiming to maintain at about 32 per cent this year, positioning us well to accelerate growth."
Addressing digital transformation and customer security challenges, he acknowledged recent concerns but reassured that MB is intensifying its investment in IT to enhance service experience.
"MB is rolling out biometric features for transactions to improve account management for our customers," he added.
MB's chairman Luu Trung Thai highlighted the bank's robust credit growth last year of 28.2 per cent that positioned it as a sector leader by fully leveraging the approved credit limit.
"For this year, the bank has been tasked with achieving a credit growth rate of 15-16 per cent," said Thai.
He further elaborated that MB is prepared to exceed the general market growth rate under favourable economic conditions and has been assigned to restructure a zero-dong bank.
Regarding provisions for loan losses in the context of rising non-performing loans, CEO Anh commented, "Increasing provisions significantly is not feasible as it impacts both profit and tax obligations. However, we maintain a bad debt coverage ratio of over 100 per cent, as required by regulatory bodies, and plan to continue this practice in 2024 and beyond."
Anh also discussed the broader challenges facing the banking sector and the economy, including slow economic recovery indicators in the first quarter, ongoing global geopolitical instabilities, and persistent high inflation in the US.
"The Federal Reserve's anticipated interest rate cuts have now been deferred to the third quarter of 2024, contributing to ongoing economic uncertainties. MB is focused on optimising costs and operations to ensure revenue and profit targets for 2024 are met. We have recently shifted towards retail banking and will continue this strategic orientation from 2022 through 2026, with retail loans expected to account for over half of total loans in 2024, due to our expansive customer base," said Anh.
Anh also provided an update on the outstanding loans of Novaland and Trung Nam Group at MB.
"Last year, MB recovered VND2.4 trillion ($100 million) of debt, and the current outstanding debt is not significant. MB's loans are based on specific project disbursements, and there is no cause for concern due to our tight risk management and collateral control," he said.
Regarding ongoing projects at Novaland, resolutions are expected in the second quarter.
"The company has been actively resolving procedures for two key projects, Aqua City and Novaworld. The most crucial aspect is that the legal process is progressing well, in line with the timeline supported and announced by the government. The recovery prospects for these projects are quite promising," Anh added.
For Trung Nam Group, MB financed three solar power projects, all of which fall under feed-in tariff schemes 1 and 2 and have been generating electricity as planned.
"Indeed, while cash flows from Trung Nam's projects have experienced some delays over the past three months, this has not adversely affected the ongoing operations of our clients or MB. At this stage, there are few concerns," Anh explained.
With a pre-tax consolidated profit of over VND26 trillion ($1.1 billion), up 15.7 per cent from 2022, and the bank itself posting profits of approximately VN24.5 trillion ($1.03 billion), up 21.5 per cent from the previous year, the shareholders approved a dividend payout rate for 2023 at 20 per cent, including 5 per cent in cash.
Looking ahead, MB's leadership is committed to a strategy focussing on enhancing operational quality and establishing a robust foundation for long-term resources, with the goal of positioning MB among the top three banks in efficiency and safety. Additionally, the bank aims to increase its customer base to 30 million by its 30th anniversary.
MB is targeting a 13 per cent increase in total assets this year and will strive to achieve at least 30 per cent of its revenue from digital channels, aiming for half by 2026. The bank is also integrating Environmental, Social, and Governance criteria into its long-term corporate goals, aligning with sustainable development strategies.
In addition, MB plans to boost its charter capital by over VND8.579 trillion ($357.46 million). This increase includes VND7.959 trillion ($331.63 million) through stock dividends. Additionally, MB aims to enhance its capital by approximately VND620 billion ($25.83 million) by privately issuing 62 million shares. The capital increase is scheduled to be implemented from 2024 until the second quarter of 2025.
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