2024 BUSINESS PERFORMANCE UPDATE
Techcombank is one of the largest joint-stock banks in Vietnam, achieving remarkable success. TCB consistenly focuses on developing technology to lead the digital transformation in the financial sector and remains at the forefront of retail banking products. In addition to its strong position in real estate lending and mortage loans, TCB has recently been diversifying its credit portfolio.
- Pre-tax profit (PBT) reached VND 27.54 trillion, marking a 20.3% YoY increase. Total operating income (TOI) amounted to VND 46.99 trillion, up 17.3% YoY.
- Net interest income (NII) for the entire year reached VND 35.5 trillion, reflecting a solid 28.2% YoY growth. NIM (Net Interest Margin) showed a declining trend in the fourth quarter (Q4), standing at 3.9%, down by 0.3 percentage points compared to the third quarter (Q3), as asset yields significantly decreased when TCB hit its credit ceiling in Q3 and proactively lowered interest rates to support real estate developers. However, on a full-year basis, NIM improved to 4.2% compared to 4.0% in 2023.
- Credit growth reached 20.8%, fully utilizing the quota approved by the State Bank of Vietnam (SBV). Notably, personal lending outpaced corporate lending. Customer deposits grew positively by +24.3% YoY. The CASA ratio recovered to 40.9%, the highest among banks in the system.
- The non-performing loan (NPL) ratio was well-controlled at 1.17%, showing a slight decline from 2023. Meanwhile, Stage-2 loans also exhibited a decreasing trend, reducing the pressure on provisioning. The bad debt coverage ratio improved to 114%, the highest level in the past six quarters.
INVESTMENT THESIS
Sustained high profit growth in 2025: (1) TCB is one of the few banks that consistently maintains a high credit growth rate, expected to reach 22% in 2025 and an average of 18%-20% during the 2026-2027 period. (2) NIM is expected to remain stable at around 4.2% as lending costs recover, offsetting the increase in funding costs. Additionally, effective capital cost management is supported by TCB’s top-tier CASA ratio (2025F: 40%). (3) Stable asset quality, with credit cost declining to 0.8% due to stronger financial conditions among customers, While the NLP ratio is maintained at 1.2%. (4) Non-interest income is expected to improved in 2025, driven by the relaunch of Banca operations in collaboration with TCB’s insurance subsidiaries. Pre-tax profit for 2025F is projected to reach VND 34.42 trillion (+25.0% YoY).
Potential for valuation upgrades. TCB plans to sell a 15% stake to a strategic foreign investor in the near future. Additionally, TCBS is preparing for its listing process, which could significantly enhance TCB’s valuation to a new level.
Attractive valuation. With a current P/B ratio of 1.15 and a 2025F P/B of just 1.0, TCB remains undervalued given its position. TCB consistently ranks among the top banks with strong profitability, boasting an ROE of approximately 16%. Therefore, TCB is currently undervalued relative to its standing in the banking sector.
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