VIB: Pretax profit 2018 nearly doubles to 2.74t dong with 48 percent y/y revenue growth

  • Total assets at nearly 140t dong
  • Deposits grow at 22.7% y/y; lending, 17.5%
  • Bad debt ratio at 2.2%
  • No details on 2019 fiscal targets given

Impressive profit growth
Vietnam International Bank announced its financial statements for the full year 2018. Accordingly, profit before tax reached VND 2,741 billion, growing by 95% compared to 2017 and 37% higher than the figure assigned by the Shareholders General Meeting from the beginning of this year. This is the second consecutive year that VIB’s profit growth rate gained approximately 100% per year.

VIB’s revenue increased by 48% compared to last year, in which interest income and non–interest income increased by 40% and 92% respectively. Non-interest income rapidly grew by boosting service activities and diversifying revenue, therefore currently contributed 20% to revenue. Significant surge in revenue and well-managed expense helped cost to income ratio (CIR) meet effective level of 44%, decreasing by 13%. Return on equity (ROE) sharply increased to 22.5%, among banks with highest ROE. Retail banking business continued making key contribution to VIB’s growth with revenue from this business up by 90% versus last year. Wholesale banking and Treasury banking businesses also gained significantly growth in which profit increased by 22% and 49% compared to 2017.

Provision expense was VND 661 billion, 73% higher than 2017 because VIB bought back all bad debts sold to VAMC, made provisions and moved most of these debts to off-balance sheet.

Robust balance sheet, high CAR
As at 31 Dec 2018, total asset of the bank reached nearly VND 140,000 billion. Deposit rose by 22.7% versus last year. Lending balance reached VND 98,933 billion, up 17.5%. Of which, retail lending balance amounted to VND 74,300, rising by 48% in 2018 after having risen by 83% in 2017.

Thanks to this impressive growth rate, VIB surpassed many big joint stock banks in terms of retail lending balance and affirmed its position as one of joint stock banks with high retail lending market share.

VIB’s safety ratios were effectively managed and complied with State regulations. Specifically, ratio of short-term deposits used for long-term loans stood at 36.5% (maximum 45%). Capital adequacy ratio (CAR) under Circular 36 reached 13.0% compared to minimum of 9%. VIB was one of first five banks no longer has bad debts at VAMC, non–performing loan ratio (NPL) at low level of 2.2%.