Year 2024: Sacombank accelerates business and digital transformation, aiming to successfully restructure ahead of schedule

The Sacombank Shareholders' Meeting in 2023

The 2023 Sacombank General Meeting was attended by 1,329 shareholders, representing over 65% of the voting rights. The shareholders approved: the report of the 2023 activities and the direction and objectives for 2024; the audited separate and consolidated financial statements for 2023; the profit distribution plan for 2023 and the profit distribution plan for 2024; the remuneration for the Board of Directors and the Supervisory Board for 2024; and other important matters related to management, operations, and investments. The assembly also agreed on the number of members for the Supervisory Board for the term 2022–2026 to be five, delegating the Board of Directors to carry out the necessary procedures according to the regulations.

In 2023, the pre-tax profit reached VND 9,595 billion, an increase of 51.4%, with many indicators exceeding expectations.

The results of 2023 showed that Sacombank met most of the targets set by the shareholders' meeting, with several indicators surpassing expectations: pre-tax profit of VND 9,595 billion, up 51.4%; ROA and ROE profitability ratios reached 1.22% and 18.3%, respectively, increasing by 0.31% and 4.47%, significantly higher than in 2022; total assets reached VND 674,390 billion, an increase of 13.9%, with income-generating assets up 14.3%, accounting for 89.6%; charter capital was VND 18,852 billion; total mobilized funds reached VND 578,029 billion, an increase of 11.3%, with 90.8% coming from market 1, accounting for 3.9% of the industry's deposits; total credit outstanding reached VND 482,731 billion, up 10%, accounting for 3.5% of the industry's market share; overall bad debt decreased by 0.16%, with the on-balance sheet bad debt ratio at 2.1%, up 1.18% from the beginning of the year amid increasing credit risk and declining repayment capacity of customers; safety indices complied with regulations.

Chairing the Sacombank Shareholders' Meeting in 2023.

Ms. Nguyen Duc Thach Diem, Permanent Vice Chairman and CEO of Sacombank, stated, "Sacombank is implementing the post-merger restructuring plan, with the final issue related to the treatment of Mr. Tram Be's shares. Sacombank has submitted a detailed proposal to the SBV and is awaiting approval. The resources for dividend distribution are ready, with undistributed profits reaching nearly VND 18,400 billion, nearly 100% of the charter capital, and expected to continue to increase. Therefore, shareholders' rights are still guaranteed. The Board of Directors deeply understands the shareholders' desires and is making great efforts to work with the SBV to distribute dividends. Although dividends have not yet been distributed, the market price of Sacombank has grown significantly, which somewhat compensates the shareholders."

Ms. Diem also noted that Sacombank successfully auctioned the debt of the Phong Phu Industrial Park project, recovering 20% of its value. The auction winner will continue to make payments to Sacombank according to the legal documentation progress of the project.

A strong reduction in the proportion of stagnant assets allowed Sacombank's credit rating by Moody’s to be restored to the pre-merger level.

In 2023, Sacombank processed and recovered VND 7,941 billion in bad debt and stagnant assets, including VND 4,487 billion from the Plan, reducing the proportion of this category in total assets to only 3%. Over the seven years of implementing the Plan, Sacombank's approach to bad debt handling has been very urgent and active, reducing the proportion of stagnant assets in total assets from an initial 28.1% in 2016 to just 3% today. Sacombank also fully provisioned for risks according to regulations, with a total reserve balance of VND 25,099 billion, an increase of 10.4%, with loan provisions up 34.3%, completing 100% for the entire portfolio sold to VAMC. Based on these results, Moody’s restored Sacombank's credit rating to the pre-merger level, upgrading the rating from B3 to B2 and updating the rating from Caa1 to B3 for the baseline credit assessment (BCA) and adjusted BCA.

Active digital transformation helped Sacombank surpass the 18 million customer mark, with the number of transactions through digital channels increasing by 51%.

 In terms of operational effectiveness, Sacombank actively embraced digital transformation in retail and operational processes. The bank was a pioneer in partnering with domestic and international partners to deploy various new payment methods, while also applying AI in customer care and enhancing customer experience. In response to the government and the State Bank of Vietnam's policies, Sacombank proactively launched several loan packages with preferential interest rates. The bank also implemented various consumer stimulus programs totaling VND 131,500 billion, thereby enhancing brand credibility and customer loyalty. The number of customers exceeded 18 million; the number of online users reached 8.9 million, up 19.8%; the number of successful transactions through digital channels reached 508 million, an increase of 51%.

In 2024, Sacombank has set the goal of "Accelerating business activities and improving effectiveness on a digital platform" with financial indicators expected to increase by at least 10%.

Despite numerous macroeconomic challenges, with a solid internal foundation and a strong digital transformation strategy, along with being at the final point of its restructuring journey, Sacombank remains confident in its goal of "Accelerating business activities and improving effectiveness on a digital platform" for 2024, with financial indicators expected to grow from 10%. Accordingly, the pre-tax profit is expected to reach VND 10,600 billion VND, total assets to increase to VND 724,100 billion, total capital mobilization to reach VND 636,600 billion, and total credit balance to reach VND 535,800 billion, with bad debt controlled under 2%, and all limits and safety ratios complying with the regulations of the State Bank of Vietnam.

Ms. Nguyen Duc Thach Diem – Permanent Vice Chairman and CEO of Sacombank speaking at the Meeting.

Ms. Diem stated that Sacombank has chosen the path of digital transformation from an inside-out and outside-in perspective. From there, Sacombank focuses on the following issues: 1) Upgrading the perfect experience for customers; 2) Building an open banking ecosystem through APIs; 3) Solving big data and AI applications to better understand customers; 4) Building a culture of creative digital transformation and applying new work methods in implementing ideas; 5) Investing in cloud computing technology and security; 6) Digitizing the entire business process from start to finish. Sacombank's customer goal for 2024 is to reach the milestone of 20 million, with each customer being a quality, loyal customer with a perfect experience with Sacombank.

Regarding the plan to achieve a pre-tax profit of VND 10,600 billion, Ms. Diem's view is as follows: “For a bank undergoing restructuring like Sacombank, a pre-tax profit growth of 10% might not be too high, but it is a growth rate that is appropriate under current conditions as Sacombank needs to consolidate its financial foundation, focus all efforts on resolving residual issues to complete the post-merger restructuring plan; at the same time, intensify promotions to support customers through difficulties and collaborate with the Government and the State Bank of Vietnam in implementing economic recovery solutions; focus on investing in information technology systems and digital ecosystems.”

Sacombank shareholders voting.

By the end of Q1/2024, Sacombank's pre-tax profit reached VND 2,654 billio, total assets over VND 693,500 billion, total capital mobilization over VND 606,200 billion, total credit balance over VND 500,400 billion, with a bad debt ratio at 2.1%. 

.Sacombank shareholders expressing opinions.

Additional information:

In the context of the Government aiming for a net-zero emissions goal by 2050, Sacombank has published its 2023 Sustainable Development Report titled “Steady Future”. Accordingly, Sacombank's next long-term goal after restructuring is sustainable development. Sacombank has now introduced a new strategy that includes four focuses for sustainable development, which are: 1. Sustainable growth (bringing long-term benefits to shareholders, customers, the community, and the country); 2. Customer focus (products and services always revolving around the primary benefit of the customer); 3. Personnel as the driving force for development (99% of management staff promoted from internal resources); 4. Transparent governance (clear organizational structure, prioritized risk management, always aiming for the latest international standards). Sacombank is confident that its sustainable development strategy will create positive changes for the community, environment, and build a solid foundation for future generations.