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OCB AGM: Target VND6,000 billion profit before tax and increase capital to VND20,548 billion in 2023 

 Thursday, May 25,2023

AsemconnectVietnam - On the morning of April 28, Orient Commercial Joint Stock Bank (OCB – Stock Code: OCB) held the 2023 annual general meeting of shareholders to approve the business plan for 2023 and a number of other important contents.

In 2023, OCB sets a target of pre-tax profit of VND6,000 billion, and plans to issue nearly 685 million shares to existing shareholders, equivalent to a 50% issuance rate. If successful, the charter capital will be increased from VND13,699 billion to VND20,548 billion.
Growth in core business segments in 2022
Speaking at the opening of the meeting, Mr. Trinh Van Tuan - Chairman of the Board of Directors said that in 2022, the domestic and international financial markets will face many unpredictable variables, issues such as wars and exchange rate pressures, high interest rates, etc. have significantly affected the overall operation of the banking industry in Vietnam.
Despite many challenges, the positive point in OCB's business picture is that core activities still maintain double-digit growth.
With full-year credit growth of 18.5%, higher than the industry average, OCB's net interest income maintained a stable growth rate in 2022, increasing by more than 21% year-on-year and reaching over VND6,900 billion. Income from services also increased by more than 29%, bringing in more than VND1,000 billion, of which net profit from foreign exchange business increased by more than 45% to over VND145 billion.
Other fee income segments of the bank also recorded high growth. Specifically, card net fee collection increased by 138% over the same period, card transaction sales increased by 83% compared to 2021. Income from asset management also increased by 55% from VND94 billion in 2021 to VND145 billion in 2022.
Along with that, the bank always focuses on optimizing the structure of profitable assets, reducing the proportion of low yielding assets. As of December 31, 2022, OCB's total assets reached nearly VND194,000 billion, an increase of 5% over the same period in 2021. Market 1 credit loans accounted for 63% of OCB's total assets, a sharp increase from 56% in 2021. Meanwhile, the proportion of investment in bonds and other assets decreased sharply over the same period. Most of OCB's credit portfolio is loans to customers, accounting for 97.6%, corporate bonds only account for a small part of about 2.4%.
In particular, one of OCB's other bright spots in the past year was that it raised NIM from 3.7% in 2021 to 3.9% in the context of the difference in deposit and lending rates in the market narrow. Although NIM growth is not too large and still lower than previous years, this result shows the best efforts of all leaders and employees of OCB in 2022.
The proportion of retail lending (a segment with high profit margins and potential for cross-selling segments) has recorded a significant change from 36% in 2020 to 40% in 2022. OCB's retail loan balance has increased significantly from VND32,100 billion to VND49,500 billion in the last two years. Especially in 2022, the growth of this segment will reach 30% while the corporate customer segment (CIB) will only increase less than 12%.
The bank also promoted the development of new customers through the digital banking channel OMNI, nearly 80% of the bank's new customers were obtained through the digital channel. By the end of 2022, the number of users increased 1.7 times over the same period, increased 63% compared to 2021 and 3.3 times higher than the beginning of 2020; the total number of transactions increased by more than 83%; Over 90% of transactions are done through digitization.
In the capital mobilization structure in market 1, customer deposits were VND102 trilliong, up 3.4%, accounting for 74%, valuable papers were VND32 trillion, up 41.5%, accounting for 23%, capital funding and investment trust is VND3.2 trillion. The structure of customer deposits has shifted towards a sustainable direction, with a sharp increase in deposits from individual customers.
The loan-to-deposit ratio (LDR) is always kept at a conservative level (75.6% at the end of 2022) based on reasonable calculations to optimize costs, cash flow, and balance sources. The ratio of short-term capital for medium and long-term loans has always remained at a safe level, complying with the regulations of the State Bank.
The Bank always maintains a high amount of liquid assets, to ensure immediate liquidity requirements, reflected in the liquidity reserve ratio much higher than the requirements of the State Bank. Therefore, OCB can stand firm against market fluctuations, especially in the fourth quarter of 2022.
In 2023, the pre-tax profit target is VND6,000 billion
Regarding the business orientation in 2023, OCB aims to continue to focus on developing the scale and efficiency of operations, focusing on promoting retail activities according to the 5-year strategy of 2021-2025. Total assets are expected to increase by 25% by the end of the year to VND242,152 billion. Total market mobilization 1 increased 26% to VND173,087 billion; Market 1 debt balance increased by about 20% to VND147,330 billion. The bank also said that the credit balance will be adjusted according to the growth limit approved by the State Bank. OCB has set a target of pre-tax profit of VND6,000 billion, up 37% compared to 2022. The bad debt ratio is under 3%.
Answering the grassroots shareholders to achieve the goal set out this year when the plan was not completed last year, Mr. Nguyen Dinh Tung - General Director of OCB admitted that the 2022 results were not achieved, in the process of development reform. OCB from 2012 to now, the last year 2022 was the only year that did not meet the plan.
But this year, OCB's Board of Management has analyzed and evaluated the development of the 2023 plan. In 2022, the plan is set at the beginning of the year in an optimistic context, the economy has many positive signals after 2 years of COVID, however, during the year, there were many unexpected and unexpected developments. In 2023, set a more modest plan than the 2022 plan.
"The 2023 plan is highly prudent and based on reality. Core business, credit growth of 21% in 2022. Government bond business in 2021 will collect 30%, In 2022, accounting for 25% of total income. VND1,500 billion is the expected income above the government bond business," said Mr. Tung.
When interbank interest rates increased, the government bond business was negative, so the main activity of credit in 2022 was still profitable, and services also achieved the highest growth rate ever. now. This is also the foundation for the development of the 2023 plan. Therefore, the profit growth rate of 2023, according to Mr. Tung, is based on the main activities of credit business and services.
Ending the first quarter of 2023 with many positive points in the context of the volatile global economy. Accordingly, profit before tax and total assets both recorded positive growth, especially efforts to strengthen risk management and focus on digitization. In the first quarter of 2023, OCB recorded a pre-tax profit of VND983 billion, up 18% over the same period.
Total net revenue reached VND2,090 billion, of which net interest income reached VND1,751 billion, accounting for 84% of the total net operating income structure of the bank. NIM remained effective at 3.9%, up year-on-year.
Operating expenses were strictly controlled in the context that total net revenue continued to increase over the same period with an operating expense to revenue ratio of 37%.
By the end of the first quarter of 2023, OCB's total assets continued to grow positively when reaching more than VND199,141 billion, up 6.1% over the same period. In addition, in the context of strong fluctuations in interest rates, the Bank's credit and deposit activities continued to grow.
In which, customer lending reached nearly VND121,914 billion, up 15% over the same period last year, total mobilization in market 1 reached VND143,752 billion, up 15% over the same period. Particularly, customer deposits recorded positive results when growing 7.2% over the same period, equivalent to VND105,564 billion.
The capital adequacy ratio (CAR), credit balance to mobilized capital (LDR) and bad debt ratio are controlled at a reasonable level, ensuring compliance with regulations of the State Bank.
Increase charter capital 2023 to VND20,548 billion
With the plan to grow the business scale continuously every year, the increase of charter capital is necessary to help the Bank improve its financial capacity, ensure the capital adequacy ratio (CAR) according to the regulations of the authorities, specifically: Increasing scale, increasing competitiveness and meeting the plan to expand the trading network; Continue to invest in technology systems to serve the banking modernization, to support the development of new products, to increase the customer service experience; Promote credit activities and capital business more effectively.
Therefore, OCB has VND7,037 billion of residual profit, of which VND2,943 billion is retained profit in 2022 and VND4,094 billion is retained profit of previous years. To serve business activities, OCB proposes to use retained earnings and other sources of equity to increase charter capital.
Specifically, the bank wants to issue nearly 685 million shares to existing shareholders, equivalent to a rate of 50%. If successful, the bank's charter capital will increase from VND13,699 billion to VND20,548 billion. The specific issuance time is decided by the Board of Directors after being approved by the competent authority.
With the proceeds from the capital increase, the bank will use VND6,176 billion to supplement capital for business, investment and lending; VND672 billion for shopping and building facilities. After increasing charter capital, Aozora Bank, Ltd. is still the major shareholder holding 15% of the Bank's capital.
Elect 2 additional members of the Board of Directors for the term 2020 - 2025
At the 2020 Annual General Meeting of Shareholders, the number of members of the OCB Board of Directors is 8 members. Currently, the Board of Directors is missing 1 member. To match the size and needs of governance, the Board of Directors submitted to shareholders for approval to change the number of members of the Board of Directors for the term 2020-2025 from 8 to 9 members.
Therefore, the Board of Directors will elect additional personnel to the Board of Directors with the candidates being Mr. Kato Shin and Mr. Nguyen Dinh Tung.
Besides, in this meeting, OCB's Board of Directors also submitted to shareholders to approve the change of the location of the bank's head office. Currently, the head office is located at 41 (ground floor, mezzanine, 1st and 2nd floors of the building) and 45 Le Duan, Ben Nghe Ward, District 1, Ho Chi Minh City.
To meet the needs of development and expansion of the headquarters area, the OCB Board of Directors found that The Hallmark building, Lot 1-13, Thu Thiem New Urban Area, Thu Duc City, Ho Chi Minh City meets the requirements of OCB, with the location of the building located in the central district area, which is being planned to become the new and largest administrative, commercial and service center of Ho Chi Minh City.
Source: VITIC/Tinnhanhchungkhoan


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