23% TOI growth, Profit before tax exceeded 10,700 billion VND in 2023

Vietnam International Bank (VIB) announced its business results based on pre-audited consolidated financial statements for 2023, showcasing consistently strong total operating income (TOI) growth, outstanding operational efficiency, solid balance sheet, and top-tier brand reputation in the industry.

Strong TOI growth with industry leading profitability

In 2023, VIB achieved TOI income exceeding 22,000 billion VND, a remarkable 23% growth compared to 2022. Interest income surpassed 17,000 billion VND, reflecting a 16% increase from the year-on-year (YOY). Non-interest income accounts for 22% of TOI, with positive contributions from credit cards, insurance, foreign exchange and income recovered from write-off loans.

Operating expenses remained well-controlled at 6,600 billion VND, a mere 7% increase from the previous year, as VIB continued its substantial investments in technology, brand development, branch network, and personnel. The 16% difference between growth in revenue and operating costs helped enhance VIB's cost efficiency, with Cost-to-Income Ratio (CIR) decreasing to bank’s historical low, and also industry-leading ratio of 30%. Consequently, pre-provision profit reached over 15,500 billion VND, a 31% growth compared to 2022.

CHART 1: VIB’S TOI AND COST-TO-INCOME RATIO THROUGHOUT 7 YEARS IN TRANSFORMATION PERIOD 2017-2023

In addition to stable business growth, to enhance asset quality and build a robust provision buffer, VIB proactively set aside provision expenses of over 4,800 billion VND, a 3.8 fold increase compared to 2022. VIB recorded 2023 pre-tax profits exceeding 10,700 billion VND. Return on equity (ROE) reached 25%, affirming VIB’s industry leading profitability efficiency position.

Robust balance sheet with credit growth of 14.2% and market lowest concentration risk

On December 31, 2023, VIB's total assets reached nearly 410,000 billion VND, an increase of nearly 20% compared to the beginning of the year. Credit balance at year end exceeded 267,000 billion VND, growing by 14.2%, fully utilizing the credit limit granted by the State Bank of Vietnam at the beginning of 2023 and surpassing average credit growth of the banking industry.

Notably, with strict risk management measures and cautious risk appetite, VIB's non-performing loan ratio significantly decreased to 2.2%, down from its peak of 2.62% at the end of Q1. This trend is expected to continue, given positive market signals and a prolonged period of low interest rates over the past two decades.

According to VIB's management, despite market fluctuations, the bank remains consistent with its retail strategy and stubborn risk appetite. Currently, VIB is one of the banks with the lowest concentration risk in the market, with maximum risk diversification. At the end of 2023, retail loans accounted for over 85% of the total loan portfolio, with over 90% of retail loans being secured. Additionally, VIB exercises caution in extending credit to potentially risky sectors. Over the past four years, VIB have no loans for activities and fields such as BOT, renewable energy, corporate bond guarantee, and real estate bond investment. Corporate bond portfolio at VIB is also among the lowest in the market, constituting only 0.3% of credit portfolio and predominantly comprising companies in the manufacturing and service sectors.

As of December 31, 2023, VIB's total funding was 283,000 billion VND, with customer deposits at 237,000 billion VND, an 18% increase from the beginning of the year. The primary growth driver comes from retail customer deposits, with an increase of 21% and a remarkable 33% surge in CASA balances compared to the start of the year. These achievements stem from strategies to attract retail customers through attractive deposit products integrated with MyVIB digital banking application, providing convenient banking experience to customers. Moreover, to diversify and optimize capital resources, VIB raises funds through various channels to ensure liquidity and minimize market risks. With its position and reputation in the international capital market, VIB successfully raised an additional 280 million USD from major financial institutions worldwide, including leading partners like UOB and Maybank, bringing total international capital to nearly 400 million USD in 2023. VIB stands as the only Vietnamese bank to successfully secure syndicated loan this year.

As of December 31, 2023, all management ratios are maintained at safe and optimal levels. The Capital Adequacy Ratio (CAR) under Basel II is at 11.7% (above SBV’s minimum requirement of 8%), the Short-term funding for Medium and Long-term loans ratio is 27% (regulatory requirement below 30%), the Lending-to-Deposit Ratio (LDR) is at 73% (regulatory requirement below 85%). The Liquidity Coverage Ratio (LCR) is 18% (above the 10% requirement), and the Net Stable Funding Ratio (NSFR) according to Basel III standards is at 115% (above the 100% requirement).

Industry's Top Rating by SBV, continuously building trustworthy and top-quality Brand

In 4Q23, VIB once again was ranked by SBV in the top highest rated group in the banking industry. VIB stands out as one of the few commercial banks achieving the highest rating from SBV for three consecutive years, based on transparent criteria set by SBV. With this result, VIB remains one of the banks with highest credit growth limit granted by SBV in 2024, above 16%.

VIB's brand reputation is closely tied to its pioneering role in applying international standards in Vietnam. In 2019, VIB became the first bank in Vietnam to successfully implement the three pillars of Basel II risk management standards. By August 2023, VIB continued to be selected by the State Bank of Vietnam (NHNN), along with nine other commercial banks, to participate in the Steering Committee for the implementation of enhanced Basel II and Basel III. Additionally, VIB was one of the leading banks to complete and issue audited International Financial Reporting standards (IFRS) reports since 2019, six years ahead of the Ministry of Finance's requirement.

Simultaneously, VIB is one of the six banks consistently ranked by the reputable Forbes magazine as the Top six best listed banks in Vietnam for three consecutive years. This recognition is based on criteria with regards to operational efficiency and profitability.

In addition to recognition from the State Bank of Vietnam and Forbes, in 2023, VIB continued to solidify its brand reputation with awards from International Finance Magazine, Vietnam Record Organization, VN50, and Card Network corporations such as Master and Visa. Specifically, VIB set two Vietnam records acknowledged by the Vietnam Record Organization for the Super Card – the first credit card in Vietnam allowing users to customize card features, and VIB Checkout – the first mobile banking app integrating Soft POS. Moreover, MyVIB app received the "Fastest Growing Mobile Banking App in Vietnam" award from the prestigious International Finance Magazine in 2023. VIB's sponsorship of “ The Masked Singer" music program made a strong impact, reinforcing VIB’s image as bank that is “Leading Credit Card trend” with over 2 billion views across all channels in 2023.

2024 marks the 8th year of VIB's 10-year strategic transformation journey from 2017 to 2026. As one of the banks with most retail oriented loan book, VIB remains steadfast in its goal to become a leading retail bank in Vietnam in terms of scale and quality. In the future, the bank will continue to create and deliver superior product and service solutions for customers, maintaining its leading position in key retail business segments. Additionally, VIB will continue to invest in digital transformation for all its products and services, develop its workforce, upgrade operational models, and prioritize risk management to ensure robust, healthy, and transparent risk management ratios.