ACB expects pre-tax profit up 10 per cent this year
ACB expects pre-tax profit up 10 per cent this year
Asia Commercial Bank (ACB) expects its pre-tax profit this year to rise by more than 10 per cent compared to 2020, the bank announced at the Annual General Meeting of Shareholders in 2021 held recently. 
ACB forecasts that total assets will increase by 10 per cent, customer deposits will rise by 9 per cent, credit will grow by 9.5 per cent and bad debt ratio will be controlled below 2 per cent. ACB's strategic focus will be on retail banking to optimise profitability.
According to Bao Viet Securities Joint Stock Company (BVS), the increase in outstanding loans to customers of ACB was mainly due to the growth of loans to individuals, small and medium enterprises. The proportion of loans to these groups accounted for 93 per cent of the bank’s loans last year. This means ACB's strategic focus was on retail banking in order to optimise profits, with higher profitability ratios, at the same time, focusing on individual customers, small and medium enterprises.
The Current Account Saving Account (CASA) continued to increase thanks to the bank’s initiative of the Vietnamese Human Resource Financial Services Package (Employee Banking) and the implementation of a trade finance solution (Transaction Banking).
In the first quarter of 2021, ACB's customer base expanded to 3.3 million, including 3.1 million individual customers accounting for 82 per cent of customer deposits. The remaining 200,000 are corporate customers.
CASA at the end of the first quarter of 2021 reached 22.1 per cent compared to 21.6 per cent at the end of 2020. According to ACB, CASA from individual customers was at 18 per cent, while CASA from business was more than 40 per cent. ACB is targeting CASA to reach 25 per cent, making it more competitive in raising capital costs.
According to Vietnam Construction Securities Joint Stock Company (CSI), an increase in the CASA ratio of banks will help reduce the cost of capital and increase the lending interest rate as the preferential loan policies will be gradually limited with the recovery of the economy. As a result, the net profit margin (NIM) trend will be high.
Income from insurance distribution through banks (Bancassurance) is also expected to be a bright spot in the profit picture of banks as it brings stable profits thanks to the distribution of insurance products and fees earned from investment-linked products.
ACB and Sun Life Vietnam Insurance Company Limited (Sun Life Vietnam) have formed a 15-year exclusive bancassurance partnership in Viet Nam.
In the first quarter of 2021, ACB's operating expenses dropped sharply, equivalent to 16.7 per cent, to VND1.97 trillion (US$85.6 million).
Recently, ACB has been approved by the State Bank to increase maximum charter capital by more than VND5.4 trillion, to more than VND27 trillion, by issuing 540 million shares to pay dividends, equivalent to 25 per cent.
According to ACB, the increase in charter capital is to ensure safety ratios for the bank, increase medium and long-term capital for credit extension activities, invest in government bonds, add capital for renovation and invest in strategic projects in the coming years.
At the end of the first quarter of 2021, ACB recorded pre-tax profit of VND3 trillion, an increase of more than 61 per cent over the same period in 2020, fulfilling nearly 30 per cent of the profit plan for the whole year.
On the stock market, ACB share is traded at VND37,900 apiece, up 31 per cent in value compared to the beginning of the year.
ACB's net interest income in the first quarter of 2021 reached VND4.6 trillion, up 36 per cent over the same period last year. Profit from service activities increased sharply by 69 per cent to VND625 billion, in which profit from the foreign exchange segment increased by 37 per cent, reaching VND196 billion. Profit from trading securities increased nearly 8 times, reaching VND113 billion.
As of March 31, 2021, ACB's total assets reached VND449.5 trillion, up 1.1 per cent compared to the beginning of the year. Outstanding loans to customers increased by 4.1 per cent to reach VND324.3 trillion.
In 2020, ACB's consolidated pre-tax profit reached VND10 trillion, up 28 per cent compared to 2019. Total assets reached VND445 trillion, up 15.9 per cent.
