Vietnam’s Techcombank sees net profits slide 17.1% in Q1
Net interest income fell, but net fee income rose.
Vietnam Technological and Commercial Joint Stock Bank (Techcombank) saw its profit before tax fall 17.1% in Q1 2023 compared to the same quarter a year ago, its latest results announcement showed.
The Vietnamese bank earned $238.9m (VND5.6t) during the first three months of the year, compared to $288.6m (VND6.78t) earned in Q1 2022.
In a statement, Techcombank CEO Jens Lottner called Q1 a “challenging quarter” but noted that the bank still reported the second-highest profit before tax amongst joint stock commercial banks in Vietnam.
In contrast, Techcombank’s net fee income “remained strong”, Lottner said. Net fee and commission income (NFI) grew 14.2% YoY to VND2.2t.
Net interest income declined 19.5% to VND6.5t in Q1, whilst net interest margin (NIM) also narrowed 4.6%.
Card income quadrupled to VND455b, which Techcombank credited to tighter control of cash-back expenses and improved anti-fraud management.
The bank’s payments volume also grew 23.3%, and strong demand for buy now pay later, with new installments more than doubling with a 154% growth.
Credit and deposit balance grew faster than the market, up 9.3% and 8.1% quarter-on-quarter, respectively.
“The market and macro environment present short-term challenges, but we remain on plan and are well positioned to lead the market when the economy improves,” Lottner said.
Techcombank expects gradual improvements in its margins and financing conditions later in 2023.
“The perspective of lower policy rates from the State Bank of Vietnam (SBV) and improved liquidity in the market could lead to a gradual improvement in margins and financing conditions later in the year,” the bank noted in its results statement.
(US$1 = VND 23,480)