VCB – Low credit costs support earnings; asset quality remains top tier - Earnings Flash
  • 2025-02-03T00:00:00
  • Company Research

VCB released its 2024 results with PBT of VND42.2tn (USD1.7tn; +2% YoY), completing 98% of our forecasts. This implies Q4 2024 PBT of VND10.7tn (flat QoQ; -9% YoY). Overall, the bottom line met our expectations due to low provision expenses despite the weak top line. We see no potential material changes to our current earnings forecasts for the medium term, pending a more extensive review.

  • 2024 credit growth was 13.9% (loan growth of 14.1%; corporate bonds decreased 11.7% YoY and accounted for 0.6% of total credit), which is slower than our forecast of 14.0% and the system-wide credit growth of 15.1%. 
  • 2024 customer deposits were 8.5% vs our forecast of 6.0%. VCB’s Q4 2024 CASA ratio was 36.7% (+1.9 ppts QoQ; +1.5 ppts YoY).
  • 2024 NIM was 2.86% (-14 bps YoY) vs our forecast of 3.02%.  Q4 2024 NIM was 2.79% (-7 bps QoQ; -10 bps YoY). The QoQ contraction in NIM was driven by a 13-bps QoQ decrease in the IEA yield, which outweighed an 8-bps QoQ improvement in funding costs.  
  • 2024 NOII was VND13.1tn (-7% YoY), completing 94% of our forecast. The YoY decline was driven by (1) a 12% YoY decrease in net fee income amid weak bancassurance income and increasing fee expenses, and (2) a 7% YoY decrease in FX trading gains. 
  • 2024 CIR was 33.6% (+1.3 ppts YoY) vs our forecast of 32.9%.
  • Bad debt metrics improved QoQ and remained the lowest in our coverage. Q4 2024 NPL ratio was 0.96% (-26 bps QoQ; -2 bps YoY). The Group 2 loans level was 0.27% (- 7 bps QoQ; -17 bps YoY).
  • VCB’s 2024 provision expenses were VND3.3tn (-27% YoY) and were lower than our expectation (achieving 70% of our forecast). VCB recorded a reversal of provision expenses of VND32bn in Q4 2024, which we believe supported VCB’s earnings. Q4 2024 LLR was 223.3% (+18.7 ppts QoQ; -7 ppts YoY). 

VCB’s consolidated 2024 results

VND bn 

 2023 

 2024 

 YoY 

 Q4 2023 

 Q4 2024 

 YoY 

 NII 

 53,614 

 55,406 

3.3%

 12,795 

 13,842 

8.2%

 Non-interest income 

 14,150 

 13,173 

-6.9%

 3,205 

 3,868 

20.7%

 OPEX 

 (21,906)

 (23,027)

5.1%

 (5,743)

 (7,040)

22.6%

 PPOP  

 45,858 

 45,551 

-0.7%

 10,257 

 10,670 

4.0%

 Provision expenses 

 (4,530)

 (3,315)

-26.8%

 1,522

 32 

-100.7%

 NPAT-MI     

 33,101 

 33,831 

2.2%

 9,428 

 8,570 

-9.1%

 

 

 

 

 

 

 

 Loan growth**

10.9%

14.1%

3.1 ppts

6.8%

3.4%

-3.3 ppts

 Deposit growth**  

12.2%

8.5%

-3.7 ppts

3.5%

5.9%

2.5 ppts

 

 

 

 

 

 

 

 NIM 

3.00%

2.86%

-14 bps

2.89%

2.79%

-10 bps

 Interest-earning asset yield 

6.04%

4.83%

-121 bps

5.66%

4.75%

-91 bps

 Cost of funds 

3.41%

2.20%

-121 bps

3.11%

2.19%

-93 bps

 CASA ratio*

35.2%

36.7%

1.5 ppts

35.2%

36.7%

1.5 ppts

 CASA ratio plus term deposits in FX    

40.8%

42.5%

1.7 ppts

40.8%

42.5%

1.7 ppts

 CIR 

32.3%

33.6%

1.3 ppts

35.9%

39.8%

3.9 ppts

 

 

 

 

 

 

 

 NPLs / Gross loans   

0.98%

0.96%

-2 bps

0.98%

0.96%

-2 bps

 Group 2 loans / Gross loans  

0.44%

0.27%

-17 bps

0.44%

0.27%

-17 bps

 Accrued interest / IEAs  

0.51%

0.43%

-8 bps

0.51%

0.43%

-8 bps

 

Source: VCB, Vietcap — *CASA volume includes demand deposits and margin deposits; ** Q4 2023 and Q4 2024 loan and deposit growth is QoQ growth; 2023 and 2024 loan and deposit growth is 12M growth.

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