Hanoi (VNS/VNA) – The VietnamTechnological and Commercial Joint Stock Bank (Techcombank) has set a pre-taxprofit target of 13 trillion VND (558.8 million USD) in 2020, just 1 percenthigher than the figure last year.

This target was approved at itsannual general meeting of shareholders (AGM) held in Hanoi on June 20.

Answering shareholders’question about the bank's modest profit growth goal, Chairman of Techcombank'sBoard of Directors Ho Hung Anh said this was a cautious plan due to the impactof the COVID-19 pandemic. In addition, it would also focus strongly on digitaltransformation, leading to an increase in investment costs and interest ratesupport for customers affected by the disease, resulting in a decline in profitmargin.

“However, if the economicsituation of Vietnam and the world recover soon, the bank's business resultswould have changes in the third and fourth quarter of this year,” Anh said.

The bank’s total assets weretargeted to increase to 431.4 trillion VND, posting a 12 percent year-on-yearincrease. Deposits will grow to 268.8 trillion VND and loan balance to 291.5trillion VND, both increasing by 13 percent against 2019, in line with thecurrent credit allowance from the State Bank of Vietnam (SBV). The bank alsoplanned to keep non-performing loans (NPL) below 3 percent, as stipulated bythe central bank’s guidance.

Techcombank’s shareholdersapproved the plan for retained earnings and investment into fundamentalcapabilities to continue future growth momentum. The bank’s strong investmentin people and systems accounts for its remarkable success in its transformationjourney. Techcombank topped the banking sector in terms of profitability andoperational efficiency with return of asset (ROA) of 2.9 percent and was amongthe Top 2 most profitable banks in 2019.

It also approved the increasein charter capital to 35 trillion VND in conjunction with the issuance of 4.7million ESOP shares for key outstanding employees, in line with resolutionspassed in the previous AGM. The shares issued are for purchase rights awardedto eligible employees for performance in 2017.

Anh said Techcombank’s strategywas to focus on some sectors and segments in which they have good control andthe largest market share.

For example, five years ago,Techcombank identified the real estate segment as having advantages and rapiddevelopment. They could be fully able to control risks, develop business andreality showed that this option was a right selection in the past five years.

He said Techcombank had alwayschosen big customers with high prestige to create attractive products andservices in the market. The bank had been very cautious in selecting customers,not much but be good; not spreading to customers who have high risks.

“Techcombank always follows thetrend of low risk, high profit. Instead of working with all 10 customers, weonly work with the best three customers. Instead of working in 10 fields, only2-3 services that the bank can control,” he said.

With concerns from shareholdersabout the real estate market expected to freeze due to the pandemic, thechairman said that the bank had developed a plan to forecast risks andeverything has been under control according to Basel II.

“The bank's capital adequacyratio (CAR) is nearly 16 percent, nearly doubling the minimum requirement ofBasel II’s Pillar 1. So it is all under control.”

Techcombank planned to expandthe ecological model approach for the fast-moving consumer goods value chainand reduce the dependence on housing chains (ReCoM). It would continue toaccelerate the digital banking model to meet with demands and enhancecustomers' experience./.