The Vietnam International Bank (VIB) announced its pre-tax profit of nearly VN2.3 trillion in the first quarter of this year (Q1), up 26 percent year on year.
VIB attributed its impressive increase in pre-tax profits in the first quarter to its focus on a high-quality retail loan portfolio, with the retail loan ratio accounting for nearly 90 percent of the loan portfolio. Of which 95 percent of the portfolio was collateral.
The bank’s return on equity (ROE) was 30 percent, one of the highest in the banking industry over the period.
For three months, VIB saw total operating income exceed UN 4.1 trillion. Of the sum, net interest income reached VNĐ 3.5 trillion, an annual increase of 27 percent, while non-interest income reached VNĐ 650 billion, contributing 16 percent to the bank’s total operating income.
The bank’s outstanding loans amounted to nearly VN217 trillion and its capital mobilization grew positively by 7.7 percent to reach VN302 trillion. Meanwhile, the bank also posted credit growth of 6.1 percent in the three-month period.
Net profit margin (NIM) increased by 4.5 percent over the period reviewed, driven by a 40 basis point year-over-year reduction in borrowing costs. The NIM expansion was mainly driven by current and savings account (CASA) growth of more than 40 percent and loans from foreign financial institutions, which rose nearly 80 percent over the same period last year. These sources of capital helped VIB to keep its mobilization costs low, despite the slight rise in market interest rates.
Meanwhile, the bank’s cost-to-income ratio (CIR) fell 35 percent to its most efficient level ever, a testament to its excellent cost management performance and increasing profitability. In addition, credit costs were managed at a low level thanks to good risk management and control.
Strict risk management, safe and high-quality portfolio
In recent years, the State Bank of Vietnam (SBV) has issued many policies to ensure the safe, effective, sound and transparent functioning of the local financial market. One of these was Circular No. 16/2021/TT-NHNN, which prescribes the purchase and sale of corporate bonds by credit institutions.
As of March 31, VIB’s outstanding corporate bond balance stood at more than VN2.61 trillion or equal to 1.2 percent of the total loan portfolio – a very low figure in the banking sector.
The bonds invested by VIB were mostly issued by companies that achieved good business results, insured quality assets and strictly controlled risks. They also had a clear, safe and transparent purpose for the use of capital.
As a pioneer in adhering to leading international risk management standards, VIB has maintained its position in the market as a sustainable development bank with an industry-leading risk management foundation. Indicators of capital adequacy, bad debt ratio and liquidity strictly managed by the bank were among the best in the industry.
Recently, on April 19, VIB received SBV approval to increase charter capital by more than VNĐ5.54 trillion by issuing bonus shares at 35 percent to existing shareholders and shares at 0.7 percent to employees. After the last capital increase, VIB’s charter capital exceeded VN21 trillion, enabling the bank to expand its business on a strong capital base.
Targeting new customers, expanding the ecosystem of products and services
VIB aims to reach 10 million customers by 2026 with a focus on developing a customer ecosystem on various smart financial platforms.
In the first quarter, VIB announced the expansion of its ecosystem for opening cards in Bizverse World’s virtual environment, bringing Vietnamese users a new experience of opening virtual credit cards.
With this move, VIB became one of the first banks in Vietnam to offer customers different card opening channels, both in the real space and the virtual world, in branch offices and in leading e-commerce platforms in Vietnam and the region.
With the strategy of developing an unlimited card opening ecosystem, VIB is expected to supply the market with 2.5 million credit cards over the next five years, contributing to stronger cashless payment business in the country.
In addition, with the “one-stop-bank” model, VIB will continue to accelerate the adoption of advanced technology for account opening and transaction processes. That helps customers save time and have interesting service experiences.
The stronger technology device is also expected to optimize the benefits for the bank’s customers and increase the CASA ratio to more than 40 percent by 2026.
VIB’s 10-year transformation journey, which runs until 2026, has seen many initial successes, while gaining positive recognition from major domestic and foreign financial institutions with accolades such as Top 10 Prestigious and Effective Listed Companies, Top 50 Most Effective Companies in Vietnam and the bank with the fastest growth in trade finance business in the East Asia-Pacific region.
Recently, Credit Suisse named VIB one of the most promising banks due to strong growth and industry-leading performance in the region.
Between now and 2026, VIB will continue to focus on medium- and long-term development in digital banking and high-tech content products with the aim of becoming a leading retail bank in terms of scale and quality in Vietnam.