MB's AGM 2023

At its 2023 annual general shareholders' meeting on April 25 in Hanoi, MB presented its business plan for the year with the goal of achieving a 15 per cent growth in consolidated pre-tax profits compared to 2022, reaching $1.1 billion.

Total assets are expected to increase by approximately 14 per cent, with a bad debt ratio controlled at no more than 2 per cent. The bank also plans to distribute dividends at a rate of 10-15 per cent in 2024. Before this, the bank had achieved the business targets approved at its 2022 shareholders' meeting.

Among them, the bank's total assets at the end of 2022 reached $1.38 million, up 20 per cent on-year and exceeding the annual plan by 4.1 per cent. Pre-tax profits reached $957 million, an increase of 37.5 per cent and surpassing the plan by 12 per cent.

Specifically, its comprehensive digital transformation efforts have yielded positive results, enabling MB to gain more than seven million new customers over the past year, bringing the total number of individual clients to over 20 million.

The bank is also planning to raise its charter capital in 2023 to $2.3 billion.

During the Q&A session, avid interest was expressed in the lending scale and bond issuance of notable players in the property market, including Novaland and Hung Thinh, as well as Trung Nam in the renewable energy sector.

Responding with finesse, Pham Nhu Anh, deputy executive officer in charge of the bank’s Board of Management, elaborated on MB's engagement with these entities, revealing that MB does provide loans and bond issuance services to Novaland, a prominent real estate partner with a diversified portfolio.

Notwithstanding, MB meticulously assesses and manages each project on an individual basis, upholding stringent risk evaluation protocols.

Notably, Novaland's outstanding balance has witnessed a considerable reduction since the beginning of the year, and MB remains proactive in overseeing loan disbursement and management to contractors and individual customers, with a sanguine outlook on avoiding any potential spillover of bad debts in the forthcoming year.

Meanwhile, for Hung Thinh, MB does not provide project financing, does not hold bonds, and has only a small amount of lending in the construction sector.

Similarly, Trung Nam's lending and bond issuance are channelled towards renewable energy projects, and the company has demonstrated commendable diligence in repaying its debts in a timely manner, instilling confidence in its creditworthiness for 2023 and beyond.

Chairman of the Board of Directors at MB Luu Trung Thai, opined that the challenges associated with real estate are not limited to Novaland, but are systemic in nature, encompassing the entire real estate industry.

“The biggest problem is legal rather than financial,” Thai added.

He also underscored the need for robust regulatory and legal frameworks to safeguard the interests of all stakeholders in the real estate ecosystem.

Nhu Anh's and Thai's incisive perspectives reflect MB's astute management of real estate lending, prioritising risk mitigation and prudence in navigating this complex domain – in line with the bank's steadfast commitment to sound financial practices and stakeholder welfare.

Many shareholders have raised questions and concerns about MB's bad consumer finance debt. A multitude of consumer borrowers have become unable to repay their debts after two years of the pandemic, coupled with recent investigations into some financial companies by law enforcement agencies, which have exacerbated the problem.

Vu Thi Hai Phuong, vice chairwoman of MB's board stated that the bank is restructuring MCredit, optimising operational costs, increasing revenue, controlling debt recovery, developing a new strategy for the next phase, and repositioning the brand in the market.

In 2022, MCredit ranked second in profit with $52.2 million, behind only Home Credit, with bad debt below 6 per cent. In 2023, MCredit aims for a profit of $56.5 million, and in Q1 alone, it recorded over $13 million.

Phuong said, “MCredit's debt recovery strategy is a novel approach that places humaneness at its core. With over 1,000 debt recovery personnel, including 600 collaborators, MCredit is well-positioned to navigate through the challenges posed by the turbulent market. In times of adversity, companies with unique cultures and a focus on quality will emerge as the clear winners.”

Phuong also highlighted that MCredit has reaffirmed its commitment to these values, stating that the results achieved are a testament to the firm’s sound strategy and innovative direction.

Finally, Nhu Anh also announced that the mandatory transfer of ownership between MB and a Vietnamese bank has been presented and approved at last year’s AGM. On a side note, rumour has it the weak Vietnamese bank to be acquired by MB is OceanBank.

"Currently, we are in the process of valuing the bank for the mandatory transfer of ownership. According to the State Bank of Vietnam’s regulations, the valuation process takes 11 months, starting from March 2023, with an expected completion date of early 2024," he said.