Sacombank achieves strong growth and advances in restructuring efforts


Sacombank has disclosed the financial outcomes for the final quarter of 2023, showcasing a remarkable achievement of its primary business objectives as set by the General Meeting of Shareholders. The bank's pre-tax profit surged to VND 9,595 billion, marking a substantial 51% growth compared to the previous year, and surpassing the initial projections for the year. A significant milestone was reached with the completion of 100% provisioning for unrecovered debts previously sold to VAMC, setting the stage for the expected completion of the bank's restructuring project in the first half of 2024.

Entering a Phase of Robust Recovery

The fourth quarter witnessed Sacombank's pre-tax profit hitting VND 2,755 billion, a 45% increase year-over-year. The annual accumulation for 2023 escalated to VND 9,595 billion in pre-tax profit, up by 51% from 2022, outperforming the shareholders' expectations. This achievement is particularly notable given the challenging economic conditions and volatile international financial markets.

A significant milestone in Sacombank's financial performance is the achievement of 100% provisioning for non-recoverable debts previously sold to the VAMC, marking a crucial objective of Sacombank's restructuring plan. By fully provisioning for these debts, Sacombank has addressed a key issue that has impacted its profitability in recent years. This move positions Sacombank for improved asset quality and enhanced profitability going forward.

Commitment to Growth with Operational Safety

By the end of 2023, Sacombank's total assets grew by 13.9% from the start of the year, reaching over VND 674 trillion. Total deposits increased by 11.3% to more than VND 578 trillion, with a notable 8.8% rise in CASA deposits. Sacombank also reduced deposit interest rates by approximately 4%, with the highest rate now at around 5%. The bank's consolidated CAR ratio stood at 9.11%, with LDR and NIM ratios at 82.77% and 3.9%, respectively. ROA and ROE improved to 1.22% and 18.30%, reflecting increases of 0.31 and 4.47%. Recognition for its risk management practices came as Sacombank was certified by EY Vietnam for implementing BASEL III standards, marking a significant achievement in adopting advanced risk management protocols in Vietnam.

The bank has also reduced operating costs, administrative procedures, and unnecessary expenses to create room for reducing lending interest rates, supporting the business community and individuals in overcoming difficulties. Accordingly, Sacombank has deployed VND 131.5 trillion in preferential interest rate loan packages to aid customers in developing production and business and stimulating credit growth. Of this, VND 56 trillion is allocated for loans at interest rates from only 3% for more than 3,000 businesses to access capital, and VND 75.500 trillion for loans at interest rates from only 6% for more than 35,000 individual customers. As a result, loans reached nearly VND 483 trillion, an increase of 10%.

Despite the general economic challenges, bad debt remains an unavoidable issue. However, Sacombank has managed to maintain control and improve asset quality, with profitable assets accounting for nearly 90%. The bad debt ratio is kept at 2.1%.

The bank has invested significantly in digitalization to keep pace with technological advances and enhance product and service systems, thereby improving customer experience. Sacombank has actively responded to the Government and the State Bank of Vietnam's policies by implementing economic stimulus solutions and promoting non-cash payments. This includes launching a series of fee exemption and reduction incentive programs at the start of the year, with a strong focus on digital transactions. Sacombank recorded transaction sales through online channels exceeding 6.4 million billion VND, a 10% increase over the same period. However, the service fee exemption/reduction policy has impacted revenue, requiring time to offset the initial investment costs.

Furthermore, amidst the general challenges of the insurance market, Sacombank has concentrated on standardizing exclusive insurance distribution activities towards openness, transparency, and compliance with the regulations of the State Bank of Vietnam. Consequently, revenue from this sector has decreased compared to the previous year.

Enhancing customer experience

Enhancing customer experience involves understanding a series of emotions and perceptions formed through ongoing interactions with a brand. Crucially, the quality of both products and services, as well as customer care, plays a significant role in defining and improving this experience.

In this vein, Sacombank has been a pioneer in applying Artificial Intelligence (AI) to introduce the first keyless switchboard in the Vietnamese market. Specifically, AI has been integrated into Sacombank's 24/7 hotline - 1800 5858 88 as an intelligent virtual assistant. This assistant is capable of quickly understanding customer needs through keywords and providing accurate feedback in a natural, human-like tone. Throughout this process, customers simply interact via voice without the need to press any buttons, as was traditionally required. Furthermore, AI technology has been implemented in customer support chatbots on the website and Sacombank's Fanpage, enabling the automatic handling of common inquiries. The introduction of the keyless switchboard represents a step towards ensuring all customer interactions with Sacombank are smooth and effective. Moreover, it is a part of the comprehensive digitalization roadmap that Sacombank is pursuing.

In addition to customer care initiatives, Sacombank has introduced various modern payment methods through collaborations with Big Tech firms like Apple, Samsung, and international card organizations such as VISA, Mastercard, and American Express. In 2023, the bank plans to launch an array of trending service products, including Apple Pay, a QR code scanning service for cross-border payments in Cambodia, and the Sacombank Platinum American Express cards, which offer exceptional cashback and convenient integrated payment options like the Visa UNIQ Platinum credit card. Sacombank is also advancing the completion of the Open Banking model, thereby enhancing partnerships with fintech and e-commerce companies, as well as electronic and technology partners through API connections to introduce more convenient payment options.

Currently, digital customers represent nearly 70% of Sacombank's clientele, a number that continues to grow daily.

Accompanying community development

From its inception, Sacombank has been committed to advancing development alongside its business objectives, always aligning its operations with social activities. The bank proactively supports the Government's initiatives to stimulate economic demand, promote green credit, and develop sustainable models and processes in line with ESG standards.

Sacombank actively collaborates with local agencies and departments to organize volunteer programs, poverty alleviation efforts, and initiatives that encourage a culture of learning and positive, healthy living. Many of these programs have become cultural hallmarks of their communities and bear Sacombank's imprint, including the "Nurturing Dreams" scholarship, the "Sacombank - Sharing from the Heart" blood donation campaign, and the "Steps for the Community" fundraiser for building cultural houses for ethnic minorities.

Recently, the bank organized the 21st annual "Spring Warmth" charity series – The Year of Dragon 2024, aiming to bring the joy of spring to thousands of lonely elders, orphans, disabled children, and those in difficult circumstances across 52 provinces and cities in Vietnam, as well as in Laos and Cambodia. This year's budget for the series of activities is VND 8.5 billion. Over 21 years, Sacombank has dedicated more than VND 94 billion to this charitable cause, demonstrating its long-term commitment to social security and local economic development.

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