VIB posts $358 million profit alongside impressive credit growth
VIB posts $358 million profit alongside impressive credit growth
By reporting total assets exceeding VND493 trillion ($19.6 billion), VIB has sustained its momentum by reinforcing its solid balance sheet and achieving greater operational efficiency. The bank continues to adopt international standards while enhancing its reputation and establishing its position as a top brand in the banking industry.
VIB total assets for 2024 exceeded VND493 trillion ($19.6 billion), marking a 20 per cent increase compared to the beginning of the year. The bank’s outstanding credit balance reached VND325 trillion ($12.9 billion), achieving remarkable growth of nearly 22 per cent, the highest among private joint-stock banks. This growth was driven by all four key segments: retail, corporate banking, small- and medium-sized enterprises, and institutional banking, supported by competitive loan rates and streamlined, flexible, and fast procedures.
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Retail lending accounted for nearly VND260 trillion ($10.4 billion), maintaining an 80 per cent retail ratio–the highest in the industry–with the lowest credit risk concentration in the market. Over 90 per cent of retail loans are secured, primarily by residential properties and land with valid legal status and high liquidity.
VIB also holds one of the lowest proportions of corporate bond investments in the sector, representing only 0.2 per cent of its total outstanding credit balance. All bonds are concentrated in manufacturing, trade, and consumer sectors, ensuring a balanced and secure investment portfolio.
Credit growth at VIB (2019-2024) |
According to a VIB representative, with the bank being granted one of the highest credit growth quotas in the industry, it has ample room to expand across various customer segments. However, VIB remains steadfast in its prudent risk approach, avoiding loans to high-risk sectors and refraining from loosening credit conditions to pursue growth at all costs. This strategy ensures the bank’s operational safety and contributes to the stability of the banking system, avoiding potential long-term consequences.
Despite the banking’s industry deposit growth remaining subdued over the past few years, VIB has achieved robust growth in customer deposits, up over 17 per cent compared to the start of the year, increasing total deposits to VND276 trillion ($10.9 billion). This strong performance ensures liquidity and resources to support credit activities. Retail customer deposits reached nearly VND200 trillion ($7.97 billion), up 14 per cent. Particularly, low-cost funding sources (current accounts, saving accounts, and foreign currency deposits) grew by over 35 per cent year-to-date, aligning with the bank’s strategy to optimise funding costs, contributing to a 14 per cent reduction in interest expenses for 2024 compared to the previous year.
Improved asset quality with safe and transparent risk management
VIB continues to pursue a prudent strategy, balancing its goals of credit growth, asset quality, and operational efficiency. By regularly reviewing credit policies, focusing on high-quality customer segments and collaterals, and implementing measures to control and prevent bad debts, the bank has significantly enhanced its asset quality.
Special-mention loans (Category 2) in 2024 decreased by nearly VND4.1 trillion ($163.4 million), equivalent to a 28 per cent reduction from the beginning of the year. Similarly, substandard loans (Category 3) and doubtful loans (Category 4) declined by 9 per cent and 28 per cent, respectively, amounting to a total reduction of nearly VND1.2 trillion ($47.8 million). The non-performing loan ratio stood at 2.4 per cent at the end of last year.
VIB is among the few banks with low accrued interest and fee receivables, totalling approximately VND2.57 trillion ($102.4 million)–down 30 per cent from the end of 2023 and representing 0.5 per cent of total assets. For comparison, this ratio at many banks ranges from 1 per cent-2 per cent, with some exceeding 3 per cent. This reflects VIB’s transparency, the quality of its revenue as reported in financial statements, and its cautious approach to retail credit accounting.
VIB’s safety indicators remain at optimal level, with a Basel II Capital Adequacy Ratio of 11.9 per cent (regulatory requirement: over 8 per cent), a Loan-to-Deposit Ratio of 72 per cent (regulatory cap: under 85 per cent), a short-term capital for medium and long-term loans ratio at 22 per cent (regulatory limit: under 30 per cent), and a Basel III Net Stable Funding Ratio of 117 per cent (Basel III standard: over 100 per cent).
Proactive interest rate support, increased investments, and prudent provisions
VIB recorded total revenue of VND20.57 trillion ($819.9 million) last year, a 7 per cent decrease on-year. By focusing on high-quality customer segments with well-secured assets and launching numerous retail product initiatives with competitive interest rates, the bank experienced a minor decline in its net interest margin (NIM). However, through strategic optimisation of funding costs, VIB maintained a competitive NIM of 3.8 per cent, underscoring its resilience and effective financial management.
Beyond credit activities, VIB’s non-interest income grew by 6 per cent on-year, contributing 19 per cent to the bank’s total revenue. Income from write-off recovery reached nearly VND1.25 trillion ($49.8 million), marking an 80 per cent increase compared to the previous year. Fee income totalled VND2.1 trillion ($83.7 million), mainly driven by credit cards and bancassurance. The number of VIB credit cards exceeded 865,000, with card spending achieving a record $5 billion, equivalent to an average of VND10 trillion ($398.5 million) per month–up more than 20 per cent on-year. Meanwhile, bancassurance operations displayed positive growth following a strategic business model transformation, achieving a persistency rate of over 50 per cent.
Operating expenses for 2024 increased by 9 per cent on-year, primarily due to investments in human resources, technology, digital banking, marketing, and branch network expansion, aligning with VIB’s strategic growth in terms of scale. The bank’s cost-to-income ratio stood at 35 per cent, showing improvement compared to prior quarters as revenue recovers, cost optimisation initiatives, and newly established branches began to yield positive results. In 2024, VIB opened eight new branches in seven provinces, including three in previously unserved locations. To support its robust growth trajectory, the bank plans to expand its network further by opening 10–15 branches annually in new provinces. In early 2025, VIB also onboarded 1,200 new employees to support its business expansion goals.
Despite significant improvements in asset quality and reduced bad debt pressures, VIB maintained its cautious provisioning policy, allocating VND4.35 trillion ($180.5 million) in provisions, a 10 per cent reduction compared to the previous year, while ensuring stable coverage ratios.
VIB’s 2024 pre-tax profit totalled over VND9 trillion ($358.6 million), reflecting a 16 per cent on-year decline. However, this figure represents sustainable, high-quality profits that accurately reflect the bank’s business performance and market conditions. The return on equity is at approximately 18 per cent, underscoring the bank’s strong profitability.
