Aiming to become one of the top 10 banks in ASEAN, Vietnam’s Techcombank is prioritizing sustainable growth over the long term, even as the bank delivered another year of sizzling hot growth in 2021.
The rate of Techcombank’s rise within the Vietnamese banking industry was highlighted last year when it became the first non-state-owned bank to join Vietnam’s “billion-dollar profit” club.
“Even in the very tough environment we are seeing, our employees have maintained a high quality and reliable service for our customers and this is helping us to deliver stellar performance year after year,” said Jens Lottner, CEO of Techcombank.
Last year, the lender continued to reduce costs while focusing on building deposits in its current accounts and savings accounts (CASA), which Lottner described as a “stable and cheap” source of funding. Techcombank’s CASA ratio, which reflects the percentage of the bank’s total deposits that are CASA, jumped from 46.1 percent in 2020 to 50.5 percent last year, well on its way to the target of 55 percent by 2025.
Techcombank’s net interest margin (NIM), a measure of the difference between the interest received by the bank and the amount paid out to lenders, also increased 69 basis points to 5.6 percent during the year. “Together, these improving metrics, along with our effective cost management, translated into an excellent profit before tax of approximately VND23.2 trillion [US$1 billion] last year,” Lottner elaborated.
“The strength of Techcombank’s balance sheet, coupled to its robust performance, enabled the bank to finance increased support for those customers facing difficulties due to COVID-19.”
Lotter, who spent most of his career in the financial services industry in Asia, believes that with a return on average assets of 3.7 percent, Techcombank is now one of the most efficiently operated banks across all of ASEAN.
Customers are the priority
Techcombank’s success in recent years has been based on a customer-centric strategy, said Lottner. This places huge emphasis on understanding individual customers and providing them with personalized experiences and solutions to meet their needs.
At the heart of the bank’s strategy is the enhancement of its digital and data processing capabilities that are helping to paint a more holistic picture of customers and empowering customer engagement through digital channels.
Breaking the stereotype of incumbents being slow to adapt, Lottner explained that Techcombank was striving to achieve a level of technology adoption where “there’s no big difference between us and any fintech business in terms of technology.”
Techcombank’s digital transformation was highlighted in April 2022 when it launched its new mobile banking app, enabling customers to access a full range of retail banking products and services on the go from their mobile phone.
“Intelligent insight is the differentiation that the new Techcombank app will bring, so that we can still underwrite you even if you’re a new-to-bank customer,” Lottner said, adding that the app will, in the long term, enable human-like interaction with customers, and that the bank planned to migrate five million customers to its upgraded app by the end of this year.
“Once we can build out that seamless experience over digital channels, just as if a customer was interacting in a branch, and we scale that up, it will be very hard for competitors to replicate,” he explained.
Techcombank’s commitment to technology and data runs throughout the organization, the executive underlined.
“We aim to be a cloud-based company, and we are currently building a data lake in the cloud that will empower better and faster decision-making and time-to-yes for customers,” he revealed.
Lottner divulged that Techcombank hired about 4,300 new employees in 2021 alone, roughly 700 of whom were recruited into technology, digital, and data. In addition, new software platforms are being implemented across compliance, training, transaction banking, customer relationship management, underwriting, and other functions.
Digital adoption appears to be the right strategy for banks in Vietnam and this is reflected in the feedback Techcombank receives from its customers.
According to the Vietnamese lender, its brand consideration score was well above the industry average and its Net Promoter Scores (NPS), which reflects customer loyalty and satisfaction, reached 83 in Q4 2021, smashing the industry average of 69.3.
Techcombank has earmarked $500 million for tech and cloud investments over the next five years, and Lottner anticipated deployment will happen very fast.
|Techcombank hired about 4,300 new employees in 2021 alone, roughly 700 of whom were recruited into technology, digital, and data. Photo: Supplied|
Others appear to be following suit. Public investment in cloud technology is expected to grow at 16.2 percent a year through 2024, or 3.5 times higher than the expansion of the banking industry’s overall IT budget, as per IDC’s Banking on the Cloud 2021 Survey.
Another report on cloud computing within the financial service industry by Deloitte shows that the banks of 2030 will look very different from today, driven by changing consumer expectations, emerging technologies, and alternative business models.
The report said cloud-based data will be a “game-changer” for financial institutions to drive improved business performance and shareholder returns, through creating new business frontiers and optimizing the organization.
Techcombank has cautiously hedged against the turmoil caused by the pandemic to assure that operations are backed by a strong capital and liquidity foundation.
Its operational metrics, such as capital adequacy ratio (CAR), loan to deposit ratio, and short-term funding to medium-long term loans, performed better than the requirement set by the central bank.
“If we zoom out to have a more holistic view, it’s not just about the numbers on the balance sheet, but it’s all about sustainability,” Lotter opined.
“As long as we continue to implement our strategy, we will be able to deliver superior profitability and performance.
“We’re doing this because we are determined to build a sustainable bank that can keep on delivering the best experience possible for our customers.”
Last year, the lender trumpeted its target of a $20 billion market capitalization by 2025.
“We are well on track to meet this target,” said the CEO.
He explained that given its current trajectory, the bank would reach roughly $8 billion in equity and over $2 billion in pre-tax profit by 2025.
“If you take banks across the region, who are showing the numbers we have in terms of the growth and return on assets, they usually trade at 3-4 times book,” he said.
“We should be able to get to even higher numbers.”
That is in line with Techcombank’s ambition to become one of the 10 biggest banks in the region.
“If we want to live up to our vision of ‘Change Banking, Change Lives’ and having a positive impact on customers and on Vietnam, we need to have very strong banks,” Lotter said.
“And that’s what we aspire to be.”
While the Vietnamese economy is on its way to recover from global disruptions, the country is not completely immune to global supply chain impacts, from the post-pandemic aftermath to the Russia-Ukraine conflict lately.
“Current global events are causing some market uncertainty, but that won’t change our long-term approach,” Techcombank’s CEO asserted.
“We will continue to do what we’re doing well, which includes affluent banking, financing the real estate sector, and transaction banking.
“We will also go into future growth areas, such as everyday banking, SME-lending, and ecosystem partnerships.”
On a broader view, he expected Vietnam’s GDP forecast of 5-6 percent in 2022 would remain intact.
“In times like this, we still keep our financing lines open,” he said.
“And we don’t have a lot of exposure to the directly impacted sectors.
“As a country, we’re still pretty much insulated against the current scenario.”
By the end of the first quarter, Vietnam’s international borders saw a complete reopening, about three months earlier than anticipated.
“Economic activities domestically have resumed with almost all restrictions lifted, and we are seeing strong demand for all our products and services,” the executive said.
“We will continue mobilizing our strong balance sheet to support our customers’ growth as they reaccelerate their operations and consumption.
“Vietnam’s economic recovery is well underway.”
C.T. Group honored as one of the best companies to work for in Asia
The prestigious award of “Best Companies to Work for in Asia” was presented by the continent’s leading magazine – HR Asia.
This is the second time CT Group has received this prestigious award and the first time that this Corp has surpassed nearly 600 “competitors” in Vietnam to achieve the highest score at 4.68/5 points (94%).
This score is 25% higher than the average score of businesses competing across Asia in 2022 and far from the average score of Vietnam, according to the property developer.
Achieving the position that many businesses across the continent aim for is not easy since the list of “Asia’s Best Places to Work” is selected through an extremely rigorous evaluation process.
The evaluation was made according to the TEAM (Total Engagement Assessment Model) model which is based on a set of criteria including Core, Self, Group applied to major human resource markets in Asia.
Accordingly, CORE (Collective Organization for Real Engagement) assesses culture, discipline, management capacity, leadership, and agile initiatives; SELF (Heart, Mind, Soul) assesses the level of cohesion, pride, and emotion at work; and GROUP (Think, Feel, Do) measure the level of cooperation of members with businesses.
“CT Group is extremely proud to become one of the Enterprises with a fantastic working environment in Asia 2022,” said Ms. Nguyen Thi Tien Phuong Deputy Director – Community Human Resources Department of CT Group during the honoring ceremony.
“Our group is the center of human development with a way of wisdom, dignity, skills and lifestyles. In addition, to economic development for common prosperity for all members and their families. “360-degree policy” – is a policy that cares for the development of physical and spiritual life in all aspects.”
On the 30th anniversary of the Corporation’s establishment, CT group has awarded an attractive ESOP stock bonus, even a chauffeur received ESOP stock shares which were equal to VND10 billion, life insurance – Lifetime insurance with preferential rates to billions of Vietnam dong.
The market is always impressed with the team that rewards cars for employees annually, everyone is happy in an open and especially loving environment.
At work, employees also have the opportunity for physical training, improve health and feel a positive life. In addition, CT Group regularly organizes entertainment activities, social participation, tourism, and vacation every year. Moreover, the journey of CT Group Caravan is one of the important pieces to building the corporate culture of the Group.
|CT Group is the door to access science and technology from the world and enter the future 4.0 of humanity. Photo: CT Group|
The activity was inspired by the program of West Point Military Academy (USA), which trained many leaders globally. If you like the community service activities, the CT group is an opportunity for all of you to join hands to contact the community right away, the honest poor, the weak in society, because the core value of CT group is a corporation for the community right from the early days of its establishment.
For young people who love hi-tech, CT group is the door to access science and technology from the world and enter the future 4.0 of humanity. The catchphrase from veteran employees:” CT group is a place where an ordinary employee can become great people”.
After 3 decades of establishment and development, with the second 30-year plan, CT group aims to add resources up to 25,000 by 2025, CT Group is attracting many outstanding talents not only in domestic but also all over the world, from foreigners to expatriates with knowledge, overseas talents, those from many different fields such as High Technology (Cell Tech, Fintech, AI, Protech, Flytech, Clean Energy ) finance, construction, sales – marketing, … to contribute to diversifying the staff network, serving the strategy of technological transformation with a scale spread throughout the Group including 50 companies members and work offices in many countries around the world.
For the second time being honored as “Asia’s Best Place to Work”, CT Group not only once again affirms its position but also prepares strongly for the upcoming global integration, becoming more and more “classic, quality, difference” in creating an ideal and desirable working environment for the community.
Vietnam ready for talks with US on tax evasion investigation into Vietnamese steel pipes
Vietnam is willing to hold trade talks with the United States to timely solve arising problems regarding a U.S. anti-circumvention investigation into steel pipe products imported from the Southeast Asian country.
Le Thi Thu Hang, spokesperson of the Vietnamese Ministry of Foreign Affairs, made the statement at a regular press briefing in Hanoi on Thursday following reports that the U.S. officially initiated an investigation into the case.
Hang affirmed that the Vietnam-U.S. comprehensive partnership has witnessed progress in all fields in recent times, including in economy, trade, and investment.
Vietnam is the leading trade partner of the U.S. in Southeast Asia, while the U.S. is the second-largest trade partner of Vietnam, with two-way trade turnover exceeding US$110 billion in 2021.
“Vietnam advocates promoting economic, trade, and investment cooperation with the U.S. on the basis of freedom, fairness, and mutual benefits in accordance with bilateral agreements and regulations of the International Trade Organization (WTO),” she said.
“Vietnam is willing to exchange with the U.S. through existing mechanisms such as the Trade and Investment Framework Agreement (TIFA) to promptly solve arising problems and strengthen economic, trade, and investment relations for the interests of businesses and people of the two countries.”
In their lawsuit filed in May, major U.S. steel pipe manufacturers, namely Nucor Corporation, Bull Moose Tube, and Maruichi Steel Corporation, accused Vietnam of importing hot rolled steel (HRS), the main raw material used to produce steel pipes, from several countries, including China, for processing steel pipes to be exported to the U.S..
By doing so, the said Vietnamese exporters try to evade the respective trade remedy tax that the U.S. is levying on several countries, including China, according to the lawsuit.
The U.S. Department of Commerce recently decided to officially initiate a probe into the case.
Masan Group honored in Top 50 Corporate Sustainability Awards 2022
This award aims to promote the sustainable development trend spreading among the business community and Vietnamese society and honor businesses that typically implement sustainable development strategies and adopt commitments for green growth and community responsibilities.
Top 50 Corporate Sustainability Enterprises 2022 were evaluated and voted based on five main assessment criteria: Stable growth, Sustainable corporate culture, Corporate governance, Environment protection, and Social responsibility. The judicial panel is reputable international and local experts.
Honoring green businesses, serving the community
Recently, awareness development towards systemic issues including climate change, diseases, natural resource depletion, and gender inequality has promoted investment trends following ESG criteria or sustainable investment in the region. Recognizing this importance, the Government signed Decision No. 167/QD-TTg approving the “Program to support private business sector in sustainable development period 2022 – 2025”.
The program aims to raise awareness of the private sector business community’s role and the importance of sustainable business.
Along with business, sustainable development is a key pillar of Masan’s strategy. Masan’s sustainability initiatives are focused on bringing value to social life and contributing to local communities.
|WinMartWinMart+ conducts several promotions to form green consumption habits. Photo: Masan|
Masan Group has continuously been researching and leading utility trends to improve Vietnamese material and spiritual lives and contribute to the country’s overall development.
The Vietnamese private conglomerate was recently honored in the Top 50 listed companies in 2022 held by Forbes Vietnam Magazine, for ten consecutive years. And Top 10 at Vietnam Top 50 Public Companies (VIX50) conducted by Vietnam Report.
This is the best result of Masan’s ceaseless efforts in the journey of serving our consumers and developing businesses in parallel with sustainable development. At the same time, it is the motivation for Masan constantly creates more and more quality products and services, contributing to the general development of the community, society, and the country.
Masan’s sustainable development journey
Since the early days of Masan’s establishment, community development and social responsibility have been among its sustainable development goals. Masan Group, Vietnam’s leading consumer-focused business group, believes in “Doing well by doing good” when serving the daily essential needs of consumers. Community initiatives are an essential part of its mission to improve the lives of nearly 100 million Vietnamese consumers.
The largest modern retailer with nearly 3,000 WinMart/WinMart+ supermarket and mini-marts – WinCommerce always upheld the spirit of Vietnamese people using domestic goods and keeping the retail sector for Vietnamese people.
As a result, Vietnamese goods make up 90% of products sold in the system. MEATDeli produces meat products with European standards and provides world-class animal protein for Vietnamese consumers.
Along with that, Masan Consumer also preserves and brings Vietnamese culinary culture to the world through familiar brands of fish sauce, soy sauce, instant noodles, chili sauce, etc. At the same time, it encourages Vietnamese manufacturers to upgrade to international standards and enhances the competitiveness of domestic goods.
|Masan sponsors eye surgery for people in Binh Thuan province. Photo: Masan|
Masan High-Tech Materials (MHT), the world’s leading manufacturer of high-tech tungsten metal powders and tungsten carbide (mid-stream tungsten products), always focuses on environmental protection and sustainable development. With the potential of the state-of-the-art mining and processing technology, constant innovation, research, and development of products, over the years.
Masan High-Tech Materials demonstrates sustainable and responsible mining practices complying with leading international standards, ensuring minimization of resource losses and optimization of the value of natural resources, with a mineral recovery rate of over 96%. Besides, MHT also brings outstanding contributions to Vietnam’s economy, society, and sustainable livelihoods for thousands of local workers.
In 2021, Masan Group contributed nearly VND 5,450 billion to the State budget. Since 2021, the Group has contributed more than VND 500 billion to activities to support local residents and frontline workers in the fight against the Covid-19 epidemic and to implement various community health and social security projects.
Recently, the Group sponsored eye surgery for 1,000 people in 2 provinces of Binh Thuan and Kien Giang and donated to the Ho Chi Minh City “For the national sea and islands – For the fatherland frontline” Fund 2022.
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