CHAPTER 2: FACT FINDINGS OF PERSONAL CREDIT RISK
2.1.4. Analysis Financial Statement of Techcombank from 2017 to 2020
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Table 2.1. Income Statement at Techcombank from 2017 to 2020
2017 2018 2019 2020
Net Interest Income 8,930,412 11,126,535 14,257,844 18,751,209 Net profit/loss from
3,811,902 3,535,984 3,253,353 4,188,778
service activities
Net gain/loss from forex
278,585 233,751 104,581 745
and gold trading Net gain/loss from trading securities for
396,730 168,433 397,664 321,397
trading
Net gain/loss from trading investment
855,760 756,585 1,243,759 1,496,997
securities
Net profit/loss from
1,714,891 1,633,777 1,806,728 2,279,168 other activities
Operating costs 4,698,283 5,842,507 7,312,509 8,631,154
Net operating profit before the cost of
11,645,523 12,507,261 13,755,636 18,411,331 provision for credit
losses
Cost of provision for
3,609,226 1,846,245 917,368 2,611,035
credit risks
Total profit before tax 8,036,297 10,661,016 12,838,268 15,800,296
Profit after tax 6,445,595 8,473,997 10,226,209 12,582,467
Growth Rate 31.64% 21.82% 18.77%
Source by Techcombank's Financial Report Annual 2020 Based on Techcombank's report on business results for 2017-2020, it found that the growth rate of TCB has steadily increased year by year. This is due to the continuous credit growth of 16.7% -18.8% for four consecutive years and guaranteed asset quality, reflected in the 3-5 debt ratio, especially at the end of 2019 when the index stopped at 1.3%. This is due to the steadfast pursuit of a low-risk, high-return strategy. As a result, the bank has succeeded in balancing revenue structure, reducing dependence on lending activities, and reducing provision costs. The most obvious evidence is shown through the cost of provision for credit risks in 2019 when there was only VND 917,368 million, the lowest in 4 years from 2017-2020. In addition, it can see that Net Interest Income and Profit after tax of the following years increase rapidly, especially in 2019 and 2020. The reason is due to
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the demand deposit balance and credit growth limit. The SBV allowed an expansion to 18.8%, two main factors that helped net interest income achieve the highest growth in 4 years and contributed 68% of Techcombank's total revenue for the period 2019-2020.
Table 2.2. Balance Sheet at Techcombank from 2017 to 2020
2017 2018 2019 2020
Asset
Cash, Gold 32,500,169 38,165,830 52,810,851 32,658,569
Deposit at Central Bank 4,279,431 10,555,483 3,192,256 10,253,324
Securities trading 6,758,130 7,572,229 10,041,556 8,347,576
Loans and leases to customers 158,964,456 157,554,103 227,885,283 275,310,367 Investment securities 51,552,167 86,524,571 66,066,820 84,459,047
Fixed assets 1,511,446 1,718,596 3,207,777 4,613,423
Other Properties 13,779,993 18,898,129 20,494,918 23,960,627
Total assets 269,392,380 320,988,941 383,699,461 439,602,933 Liabilities and Equity
Deposits and borrowings from
47,323,825 42,450,587 61,266,635 47,484,812 other credit institutions
Deposits from customers 170,970,833 201,414,532 231,296,761 277,458,651 Valuable papers issued 17,639,970 13,177,959 17,460,634 27,899,640
Other liabilities 6,527,007 12,163,158 11,602,664 12,145,044
Capital and reserves 26,930,745 51,782,705 62,072,767 74,614,786 Total liabilities and equity 269,392,380 320,988,941 383,699,461 439,602,933
Source by Techcombank's Financial Report Annual 2020 According to the balance sheet for the period 2017-2020, Techcombank's asset volume increases year by year.
The amount of cash increased gradually from 2017-2019, but this amount of money by 2020 has decreased by about 24%
compared to 2019. Next, it is easy to see that TCB performed better than lending during 2020 vs three years before lending to customers in 2020 is VND 275 trillion
- 20.6% higher than in 2019. The evidence is that Techcombank's credit balance is VND 277,524 billion, equivalent to a credit growth of 19.4%. This rate approved by the State Bank when Techcombank approved for early application of Circular 41/2016 / TT-NHNN regulating capital adequacy ratios for banks and branches of the State Bank external (The standard method of Basel II). Focusing on the retail and SME segments continues to be Techcombank's strategic focus segment with growth of 45% and 43% in 2018-2019, respectively, accounting for 46%. % and
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19% of total outstanding loans of the whole Bank. The Bank has maintained a solid shift to collateral in the personal customer segment while maintaining its growth momentum of 60% and 9% in home and car loans. The SME segment also recorded a 50% growth in short-term working capital loans in 2019 by the proposed strategic direction. Therefore, outstanding loans on the balance sheet of the following years grow more than the previous years. In addition, TCB has paid off all debts to the Government and the Central Bank in the last two years in terms of liabilities and equity. Customer deposits also increased year by year, proving that TCB is growing strongly. In addition, 2020 is also the year TCB promotes equity issue. The issuance of valuable papers in 2020 will increase by more than 60% compared to 2019.
Table 2.3. Financial Indicators at Techcombank from 2017 to 2020
2017 2018 2019 2020
EPS 5,530.00 2,789.00 2,967.00 3,521.00
BVPS 23,106.00 14,809.00 17,734.00 21,289.00
P/E 0 9.26 7.94 8.95
ROE 27.71 21.56 18.23 18.03
ROA 2.55 2.87 2.95 2.99
CASA 24,1% 28,7% 34,5% 46,1%
CIR 2,6% 2,9% 2,9% 3,1%
CAR 9,4% 14,6% 15,5% 16,1%
Source by Techcombank's Financial Report Annual 2020 In the context of a solid global outbreak of COVID-19, which led to instability that negatively affected the economy, governments responded differently. However, Vietnam's success in preventing COVID-19 showed the world its governance capabilities and boosted its economy to help it become one of the few countries to achieve growth in 2020. At Techcombank, this is reflected in the financial indicators in the table above. In 2020, Techcombank's CASA had ranked number 1 in the Vietnamese banking market and reached a record level when it reached 46.1%. It can seem that in the last four years, Techcombank has a strategy to focus on attracting demand deposits to reduce capital costs and focus on promoting digital solutions to benefit both customers and banks.
In addition, the capital adequacy ratio under Basel II reached 16.1%, helping Techcombank to have a solid capital source to support customers and create favorable conditions for growth as the economy recovers from COVID-19. Thanks to the above two factors, the market leader returns on average total assets (ROA) by 3.1% and increase in Techcombank's share price (Symbol: TCB on HOSE) up to nearly 100% in the fourth quarter of 2020.
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Figure 2.2: The figure depicts the growth of TCB shares in 2020.