VIB attributed its impressive increase in profit to its focus on a high-quality retail credit portfolio with retail loans accounting for nearly 90 per cent and 95 per cent of them being covered by collateral.

VIB posts remarkable results in Q1

The bank’s return on equity ratio was 30 per cent, among the highest in the banking industry during the period.

Over the three months, VIB saw its total operating income surpass $178 million. Net interest income reached $152 million, marking an annual jump of 27 per cent, while non-interest income hit just over $28 million, contributing 16 per cent to the bank’s total operating income.

The bank’s outstanding loans topped $9.4 billion and its capital mobilisation experienced growth of 7.7 per cent to reach $13 billion. Meanwhile, the bank also posted credit growth of 6.1 per cent over the three-month period.

The net profit margin (NIM) experienced an increase of 4.5 per cent during the reviewed period, thanks to an on-year decline in funding costs of 40 basis points. NIM expansion mainly came from current and savings account (CASA) growth of more than 40 per cent and loans from foreign financial institutions which increased by nearly 80 per cent over the same period last year. These sources of capital helped VIB keep its mobilising costs at a low level despite the slight increase in interest rates.

The cost-income ratio of the bank fell to its most efficient level ever at 35 per cent, proving its outstanding performance in cost management and increasing profitability. In addition, credit costs were kept at a low level thanks to effective risk management and control.

Strict risk control to safely create a high-quality portfolio

Over the past years, many policies were issued by the State Bank of Vietnam (SBV) to ensure the safe, effective, healthy, and transparent operation of the local financial market. One of them was Circular No.16/2021/TT-NHNN which governs the purchase and sale of corporate bonds by credit institutions.

As of March 31, the outstanding balance of corporate bonds of VIB stood at over $113 million or equivalent to 1.2 per cent of the total credit portfolio – a very low figure in the banking industry.

Bonds invested by VIB were mostly issued by enterprises which saw good business results, ensured quality assets, and strictly controlled risks.

As a pioneer in complying with leading international standards on risk management, VIB has retained its position in the market as a sustainable development bank with strong foundations. Indicators of capital adequacy, bad debt ratio, and liquidity were among the best in the industry.

On April 19, VIB received approval from SBV to increase charter capital by over $240 million by issuing bonus shares at 35 per cent to existing shareholders and equity shares at 0.7 per cent to employees. After the latest capital increase, VIB’s charter capital stood at over $913 million, enabling the bank to expand its business based on a strong capital foundation.

Targeting new customers while expanding the ecosystem of products and services

VIB is striving to reach 10 million customers by 2026, with a focus on developing a customer ecosystem on a variety of smart financial platforms.

In the first quarter, VIB announced the expansion of the card opening ecosystem in the Bizverse World virtual environment, bringing a new experience of opening virtual credit cards to Vietnamese users.

With this move, VIB became one of the first banks in the country to offer a variety of card opening channels, both in-branch and on leading e-commerce platforms.

The bank is expected to provide the market with 2.5 million credit cards over the next five years, thus contributing to stronger cashless payment activities in the country.

With its one-stop-bank model, VIB will continue to accelerate the application of advanced technology to account opening and transaction processes to save customers time and improve the service experience.

These developments are expected to optimise benefits for the bank’s customers and increase its CASA ratio to over 30 per cent by 2026.

VIB's 10-year transformation journey taking it up to 2026 has received positive recognition from major domestic and foreign financial institutions, winning awards placing it among the 10 most prestigious and effective public companies, 50 most effective companies in Vietnam, and the bank with the fastest growth in trade finance activities in the East Asia-Pacific region.

Credit Suisse has named VIB as one of the most promising banks thanks to its strong growth and leading performance in the region.

VIB will continue to focus on medium- and long-term development in the field of digital banking and high-tech products with the goal of becoming the leading retail bank in terms of scale and quality in Vietnam.