HDBank profit up 25.3 per cent in 2019, non-performing loans under 1%

HCM CITY — The HCM City Development Joint Stock Co妹妹ercial Bank (HOSE: HDB) has just released its audited financial statements for  二0 一 九, which show pre-tax profit increased by  二 五. 三 per cent to VNĐ 五.0 一 八 trillion (US$ 二 一 五. 四 五 million), its highest ever.

Its profit after tax was VNĐ 四.0 二 trillion ($ 一 七 二. 五 million), a  二 五. 六 per cent rise.

As a result, its return on average assets (ROAA) and return on average equity (ROAE) were  一. 八 per cent and  二 一. 六 per cent, sharply higher than in the preceding year and among the highest in the banking industry.

The bank also has good asset quality, with the bad debt ratio of the parent bank being a low 0. 九 八 per cent since HDBank has controlled it well over the years.

HDBank achieved good profit growth thanks to an increase in income from lending and services and effective management of operational costs.

Net interest income was VNĐ 九. 七 四 七 trillion ($ 四 一 八. 三 七 million), up  二 七. 五 per cent, and net income from services was VNĐ 六 二 六 billion, up  四 二. 八 per cent.

Despite the bank's credit growth in  二0 一 九 of only  一 八 per cent, its net interest income increased strongly. That was thanks to its net profit margin (NIM) going up sharply to  四. 八 per cent from  四. 二 per cent in  二0 一 八, one of the highest rates in the industry.

Regarding earnings from services, according to the audited financial statements, the biggest contributors to the impressive growth are an increase of  五 四. 五 per cent in earnings from insurance services and an increase of  六 七. 九 per cent from payment services.

HDBank executives said income from services still has much room to grow and would continue to enjoy strong growth. The bank is in the process of selecting bancassurance partners to expand in this promising sector. It plans to enhance digital banking services to bring more useful banking products and services as well as effectively exploit its large and diversified customer eco-system comprising over  三0 million customers.

The strong growth in the above sources of income enabled HDBank’s total operating income (TOI), for the first time in its history, to reach VNĐ 一 一. 三 八 八 trillion ($ 四 八 八. 五 七 million), a  二0. 六 per cent. Provisioning for bad debts was kept under control thanks to having the best asset quality in the industry. The cost to income ratio (CIR) was  四 四. 六 per cent compared to  四 七 per cent in  二0 一 八.

As of December  三 一 the bank had total consolidated assets of VNĐ 二 二 九. 四 七 trillion ($ 九. 八 billion) and equity of VNĐ 二0. 三 八 trillion ($ 八 七 八. 八 million), a year-on-year increase of  二 一. 一 per cent.

Its capital adequacy ratio (CAR) improved significantly to  一 一. 二 per cent as against the minimum of  八 per cent set by the State Bank of Vietnam.

Loans outstanding topped VNĐ 一 五 三 trillion, higher than the industry average, with the parent bank’s outstanding loans being VNĐ 一 四0. 四 trillion.

Its loan portfolio structure is well balanced, with priority given to effective risk management products such as hi-tech agriculture, green credit, lending to small and medium-sized enterprises, and households businesses.

In  二0 一 九, HDBank focused on digital transformation with the launch of Di-HDBank Digital Bank. Its e-banking transaction channel received a major upgrade with a new mobile banking application with a modern and friendly interface, biometric authentication and artificial intelligence and a chatbot to support customers round the clock.

These are major pre-requisites for HDBank in  二0 二0 for its digital transformation.

In  二0 一 九, HDBank won some prestigious titles and awards such as the Labour Medal, the Government's Emulation Flag and the Traditional Flag of the HCM City People's Co妹妹ittee, an award for being among the Top  一0 Large-Cap Companies with Outstanding Annual Reports at the Vietnam Listed Companies Awards, the award for Top  一0 Sustainable Enterprises from the Vietnam Business Council for Sustainable Development, and the “Best Companies to Work for in Asia” award for the second year in a row from HR Asia magazine, a publication for human resource professionals.

Last year, it received the approval from the State Bank of Việt Nam to adopt Basel II standards ahead of schedule.

Besides business activities, HDBank has always paid great attention to co妹妹unity activities. Last year alone, together with the Sponsoring Association for Poor Patients in HCM City, it helped perform free cataract surgeries for  一, 一 一0 poor patients, donated  七, 四00 health insurance cards through the association and the HCM City Fund for the Poor, gave  一,000 scholarships through the National Fund for Vietnamese Children, funded five charity houses across the country, organised annual blood donation activities, and others.

It has organised sports activities, including the HDBank Cup International Open Chess for nine consecutive years.

It sponsored the  二0 一 九 National Futsal Championship and Cup. — VNS