Chapter 3 - The Achievement of Tech
Bank-wide Management Report
“Our robust business model drove double-digit profit growth, industry-leading asset quality and capital adequacy, despite market-wide headwinds impacting our key lines of business.”
Chief Finance Officer
Alexandre Macaire
![CEO](/content/dam/techcombank/custom-code/annual-report-2022/assets/images/chapter-3/bank-wide/alex.png)
![background](/content/dam/techcombank/custom-code/annual-report-2022/assets/images/chapter-5/hero-background.png)
In 2022, Vietnam’s economy continued to show commendable resilience in the face of mounting global challenges.
Profit before tax
VND 25.6 trillion (+10.0% YoY)
Total operating income
VND 40.9 trillion (+10.3% YoY)
CASA
∼37.0%
ROE
19.6%
ROA
3.2%
CAR
15.2%
NPL
∼0.72%
![Double-digit growth in total operating income (TOI), supported by successful fee income diversification](/content/dam/techcombank/custom-code/annual-report-2022/assets/images/chapter-3/bank-wide/growth.png)
Double-digit growth in total operating income (TOI), supported by successful fee income diversification
Net interest income (NII) expanded:
13.5% YoY to VND 30.3 trillion
Net fee income (NFI) grew:
24.8% YoY to VND 9.7 trillion
- Cards: VND 1,980.6 billion NFI, +83.5% YoY
- Banca: VND 1,750.6 billion NFI, +12.3% YoY
- Trade Finance: Letters of Credit VND 2,016.0 billion, +154.0% YoY
- Cash & settlement: VND 467.7 billion, +76.2% YoY
- FX fees: VND 912.2 billion NFI, +74.8% YoY
- IB fees: VND 2,591.2 billion NFI, -28.1% YoY
Prudent cost management, focused on investing for growth
Cost-to-income ratio
32.8%
Technology and infrastructure expenses
57%
Operating expenses grew 19.9% YoY to VND 13.4 trillion, with the cost-to-income ratio (CIR) standing at 32.8%.
Personnel costs
- 88% YoY increase in training costs.
Marketing and promotion expense
- Marketing and promotion expenses increased 63% YoY in 2022
- ‘Why not?’ clip for our Inspire proposition
- ‘Mèo Đại Cát’ mega campaign
- Techcombank Ho Chi Minh and Hanoi marathon
- Our many marketing initiatives enabled us to finish the year with the highest Net Promoter Score in the industry, as measured by YouGov.
Technology and infrastructure expenditure
- Technology and infrastructure expenses increased 57% in 2022.
Strong asset growth with improved diversification
- Total assets grew 22.9% YoY to VND 699,033 billion
- Our loan and bond balances grew 12.5% YoY
- Retail loans grew 40.1% YoY
- Loans to SME customers up 7.3% YoY
- Loans and bonds to large corporates reduced by 9.9% YoY to VND 165.6 trillion
- Asset yields in 2022 improved to 7.5%.
Techcombank has developed internal liquidity management ratios and early warning triggers, enhancing the Bank’s liquidity management capabilities Finally, the Bank’s liquidity contingency plan provides a set of actions to ensure timely responses, as well as preventative measures.
Robust funding position, driven by domestic customer deposits and international institutional lenders
- We expanded total funding balances by 21.5% to VND 560.0 trillion, while maintaining a cost of funds at the third lowest level in the Vietnamese banking sector
- Our customer deposits, including CD Bao Loc, grew 12.8%
- In early 2022, we concluded a landmark USD 1.0 billion syndicated loan facility, setting another milestone in our offshore fund-raising activities.
Strong capital position
- Total equity expanded by 21.9%
- Capital adequacy ratio strengthened further, 15.2% at the end of 2022.
Prudent liquidity management
- In 2022, our liquidity regulatory ratios improved or remained broadly stable, comfortably within regulatory limits.
Liquidity ratios
- Liquidity reserve ratio
- 30 days solvency ratio – VND
- Loan-to-deposit ratio
- Short-term funding to MLT loans
Limit 2022
%- ≥ 10%
- ≥ 50%
- ≤ 85%
- ≤ 34%
Actual 31/12/2022
%- 18.10%
- 78.51%
- 76.57%
- 28.75%
Limit 2021
%- ≥ 10%
- ≥ 50%
- ≤ 85%
- ≤ 37%
Actual 31/12/2021
%- 14.98%
- 60.78%
- 75.00%
- 28.77%
Robust asset quality
- NPL ratio increased to a moderate level of 0.72% at 31 December 2022
- The bank-only NPL ratio was stable at 0.58%.
Looking forward: Volatility in the short-term but intact medium-term potential
At the end of 2021, most of Techcombank’s profitability and efficiency metrics were one to two years ahead of our five-year strategic plan.
Overall, 2023 is expected to be a year of consolidation in our growth trajectory and five-year strategic plan. The focus will be on keeping our balance sheet strong and our customer ecosystem healthy; investing in the future with a revamped suite of digital products and propositions and growing our customer base at scale.
![Looking forward: Volatility in the short-term but intact medium-term potential](/content/dam/techcombank/custom-code/annual-report-2022/assets/images/chapter-3/bank-wide/potential.png)
2023 Financial Targets
Techcombank’s Board of Directors will propose 2023 business plan to shareholders at the General Meeting of Shareholders on 22 April 2023. It outlines:
(i) Credit balance (1)
VND 511,297 billion (growth of 15% subject to SBV’s approval)
(ii) Total deposits
To be in line with actual credit growth
(iii) Profit before tax
VND 22,000 billion (down 14.0% YoY)
(iv) Non-performing loans (2)
Lower than 1.5%
(1) The Bank’s credit balance and growth are calculated according to SBV regulations
(2) Pre-CIC Bank-only NPL