MB Sustains Support for Businesses

Military Commercial Joint Stock Bank (MB, stock ticker MBB) recently organized an investors conference to update its business results and growth outlook for 2024. The event, chaired by Mr. Luu Trung Thai, Chairman of the Board of Directors, was conducted online and attracted over 300 participants, including representatives from both domestic and international investment funds and securities firms.

Mr. Luu Trung Thai, Chairman of the MB Board of Directors, presides over the investors conference

Persistent with the set strategy

Sharing with investors, Thai emphasized that MB will continue to focus on two core areas: advanced smart risk management and a distinctive corporate culture characterized by identity, sustainability, and strong capacities for learning and innovation.

“Founded nearly 30 years ago, MB has swiftly adopted innovations and new working methods, driving its team to successfully achieve all set goals,” he said.

In addition, regarding digital transformation, MB officially reached 28 million customers on August 4, 2024, he added.

“Rather than focusing solely on wealthy customers, MB is dedicated to serving clients across all segments. Our strategy involves attracting customers to engage primarily through MB's platforms, after which we tailor and enhance services to meet the needs of each segment,” he emphasized.

According to Thai, BAAS (Business Automation as a Service) is particularly well-suited for chain businesses, as it streamlines and automates the sales process efficiently. “This is a new and very promising approach,” he noted.

Overview of the investors conference

H1, 2024 business performance

Remarking MB’s business performance in the first six months of 2024 at the conference, Mr. Dam Nhan Duc, Chief Economist at MB, stated that the most difficult period has passed. Accordingly, the relatively strong revival of the service and tourism sectors and the optimistic recovery of the manufacturing sector, led by FDI firms, has created momentum for the economy to develop more strongly in the last six months and in 2024.

Regarding MB’s business performance in the first half of 2024, Ms. Nguyen Thi Thanh Nga, Chief Financial Officer, reported a 5.4% year-on-year increase in pretax profit, reaching VND13,428 billion, despite higher provisioning costs. She highlighted that the group's member companies were performing well and collectively contributed 5% to the group's pretax profit.

On scale growth, MB's credit rose impressively by 9.4%, evenly in all segments. Notably, the nonperforming loan (NPL) ratio returned to below 2% and was tightly controlled at 1.64% (consolidated) and 1.42% (separated). Besides, its credit quality continuously improved.

On operating performance, although the net interest income (NII) remained unchanged from a year-ago period due to the relatively lower interest rate in the reported period and MB actively launched interest support programs for customers according to the policies advocated by the Government and the State Bank of Vietnam; its net fee income (NFI) remarkably grew 48% year on yea. As a result, the total operating income (TOI) expanded 11% while its costs and the cost to income ratio (CIR) were effectively and optimally managed amid the likelihood of an inflationary economy. MB's pretax profit was in the Top 4 banks in Vietnam.

MB also had outstanding card operations. “After four years of diversification, MB now holds the highest market share in cards. Card spending revenue has surged, marking the bank's strongest growth period to date, with expectations for continued increases in the future,” Nga added.

Assessing MB's position in the market, Mr. Phan Phuong Anh, General Director of MBS, said that MB now has the largest customers in the market and has the fourth largest assets and loan market share. MB was one of the banks with the best credit growth in the first six months of 2024.

MB is recognized as one of the banks with the strongest credit growth during the first half of 2024

Continued business support

At the MB Investor Conference on the afternoon of August 5, Mr. Luu Trung Thai, Chairman of the Board of Directors, addressed investor concerns regarding the debts of major companies, including Novaland, Trung Nam Group and Sun Group, as well as the bank’s provisions for these debts.

For Trung Nam Group, the investor of large renewable energy projects, its outstanding debt declined by VND2,000 billion this year, he said. All 3 independent projects of Trung Nam Group funded by MB are operating well and are not classified as bad debts by the bank.

“We only focus on lending to solar power projects which are operating on schedule and have good feed-in tariffs, so they can ensure cash flow for debt repayment. This group of projects is operating well and repayable to MB’s loans in the near future,” said Thai.

Regarding the debt owned by Nova Group, Thai informed that its outstanding debt has decreased by approximately VND1,500 billion since 2023. The remaining debt to MB is notable because MB's loans are restricted to three high-quality projects: Novaland Phan Thiet, Aqua City Dong Nai and Nova Ho Tram in Vung Tau.

“Novaland Phan Thiet has quite positive signs and has no legal problems. Its land is being valued by the new Land Law. The two remaining projects, Aqua City in Dong Nai and a project in Vung Tau, have all necessary documents. Aqua City is monitored and updated regularly by MB to complete legal procedures. This process is being carried out well and is one of the real estate projects chosen to have their difficulties removed by the Government,” Thai expressed.

He affirmed that there is no problem with Nova's cash flows for debt repayment this year and expected that the two projects in Phan Thiet and Dong Nai will complete their business plans in 2025.

For Sun Group, there is no issue with collateral and its cash flows for debt repayment, Thai said.

Currently, MB's outstanding loans to Sun Group are mainly channeled for tourism projects such as Sun World Fansipan Legend or Sun World Ba Den Mountain. These projects are being operated and have stable customers and steady cash flows.

In addition, some of Sun Group's real estate projects are also funded by MB but the credit value is insignificant. MB harmoniously balances these two sources to help its customers to live through the difficult time of the real estate market.

He informed investors: “The four corporate clients have collateral values that are three times greater than their loan amounts. Consequently, we implement strict control measures for each project and maintain continuous oversight.”

By Le Hien, Vietnam Business Forum