TCB - Technological prowess to drive sustainable growth; TCBS IPO expected later this year - AGM Note

• We attended TCB’s annual general meeting (AGM) in Hanoi on April 26, 2025. The main agenda was to (1) propose 2025 business targets, (2) approve the ESOP, and (3) approve the dividend plan. The presentation by CEO Jens Lottner and the Q&A section focused on 2024 and 2025 YTD performance, the 2025 outlook and key priorities, plans for the TCBS IPO, and the launch of the bank’s life insurance business.
• 2025 guidance includes (1) credit growth of 16.4% YoY (current quota from the SBV), (2) funding growth in accordance with credit growth, (3) PBT of VND31.5tn (+14.4% YoY), (4) an NPL ratio below 1.5%. 
• Shareholders approved the ESOP with 21.4 million shares (0.303% of total outstanding shares) to be issued at a proposed price of VND10,000/share.
• Shareholders approved a cash dividend of VND1,000/share (+33% YoY), which implies a dividend yield of 3.9%.

TCB has successfully developed and implemented various digital solutions to attract both retail and corporate customers. For example, on the retail side, 3.1 million customers have activated the auto-earning feature by the end of Q1 2025, fueling strong growth in CASA. CEO Jens Lottner also indicated that the bank’s version of auto-earning is superior to others in terms of its features and technology.  

For household merchants, TCB has developed innovative solutions that provide them with (1) convenient and secured day-to-day transactions, (2) easy access to credit, and (3) ability to earn more from their cash. In 2024, the bank achieved 1.5 million merchant customers, a 3x increase in new-to-bank merchants, a 2.1x increase in end-of-period CASA balance, a 7.2x increase in lending, and a 1.3x increase in TOI.

On the corporate side, TCB has been enhancing bespoke corporate digital banking with (1) seamless digital onboarding, (2) easy digital business registration, (3) MISA lending, (4) digitization of FX, and (5) online bank guarantee issuance. In 2024, through its digital channels, the bank acquired 9,000 new corporate customers (up 3.7x YoY), processed USD8bn in FX transactions and VND10tn in bank guarantee value. 36% of TCB’s TOI from the corporate segment was derived from digital channels.

In a large part due to the digital platforms and solutions the bank has built over the years, TCB has been able to deliver strong business growth with significant operational efficiency. Specifically, although TCB's number of customers grew by 1.8x from 8.4 million in 2020 to 15.4 million in 2024, its number of branches and work force have remained largely flat. During this period, the bank’s TOI per employee grew by 1.7x from VND2.3bn to VND4.0bn, showing increased productivity.

From our perspective, these achievements demonstrate TCB’s technological prowess as one of the key competitive advantages that differentiates the bank and allows it to outperform peers over the long run. 

TCB is refreshing its five-year strategy to become the leading ecosystem in Vietnam. The bank will work to unlock differentiated growth potential by leveraging its ecosystem partners to address not only the financial needs of customers (bank, securities, insurance) but also their non-financial needs (housing, FMCG consumption, healthcare). For 2025, key priorities encompass CASA, credit diversification, fee income, expansion in the south, and working with ecosystem companies.

TCB expects to conduct the IPO of TCBS later this year, subject to macro and market conditions. The bank has been in active discussions with one-two large investors regarding a potential pre-IPO investment into TCBS. These discussions have been positive as the investors highly appreciate the company's strong competitive positioning.

Life insurance: TCB is seeking regulatory approval from the State Bank of Vietnam and the Ministry of Finance to establish a new life insurance company. The bank hopes to able to launch the first pilot products by the end of this year. TCB believes it can re-design the business model, which will require customer centricity, technology, and cost-efficient solutions to create value.

Real estate market outlook: Chairman Ho Hung Anh indicated that a trade war may negatively impact the economy, but the near-term direct impact on the real estate market should be limited. Demand for housing and investing in real estate remains significant, and the Government's commitment to invest in infrastructure will help support the market. Overall, TCB views the real estate market as continuing to recover, but returning to pre-crisis strength will depend on how the macro situation plays out.

Flexible pricing program: When the economy and real estate developers recover, TCB will recoup the interest income relief under this program. The bank may recoup a certain amount this year, but the exact number will depend on business performance.

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