Positive business results despite difficult economic context

North Asia Commercial Joint Stock Bank (BAC A BANK - Code: BAB) has just announced its 2023 financial report with positive business results despite the difficult economic context and being affected by the world market.

By the end of 2023, BAC A BANK's total assets reached VND 152,243 billion, an increase of 18.2% compared to the beginning of the year and exceeding the plan set at the 2023 Annual General Meeting of Shareholders.

Along with that, in the context of interest rates being adjusted down across the entire banking system, BAC A BANK's total customer deposits still reached VND 118,477 billion, up 22.3% compared to the end of last year thanks to good customer care policies and many unique incentives for each savings product. Good growth in deposit mobilization brings a stable source of capital to the bank, at the same time showing that customers' trust in BAC A BANK is increasing.

During the year, BAC A BANK's credit growth always complied with the limit granted by the State Bank. By the end of 2023, customer loans increased by 6.1% compared to the previous year, lower than the general growth rate of the whole industry due to the slow recovery of general loan demand of economic sectors.

The Bank has always accompanied and shared difficulties with customers through many preferential interest rate programs to support individual and corporate customers to overcome difficulties, and restructure debt for customers according to Circular 02/2023/TT-NHNN.

In the fourth quarter, the bank's business activities showed clear signs of recovery with pre-tax profit increasing by 57% compared to the same period last year, reaching more than VND510 billion. The bank's non-interest income emerged as a bright spot as it became the main driver of profit growth.

In addition, thanks to effective management, the bank's operating expenses in the last quarter of the year decreased by 18% compared to the same period to more than VND 526 billion, supporting the growth of profits. Accumulated for the whole year of 2023, the bank's total operating income reached more than VND 3,000 billion, up 6.2% over the previous year while total expenses were at VND 1,800 billion, up 6.8%. Of which, the bank's net interest income is still the main source of revenue, bringing in VND 2,389 billion.

The bank's non-interest income grew positively, contributing greatly to the increase in profits. The service sector recorded a growth of more than 15% compared to the previous year, bringing in VND105 billion in net profit. The foreign exchange trading and investment securities trading segments, as well as income from capital contributions and share purchases, all had high growth rates.

Proactive in provisioning and managing bad debt

This growth is the result of the Bank's great efforts during the year, thanks to promoting investment in digital transformation activities, cashless payment activities, a series of credit card incentives, and improving e-banking products and services to ensure security and safety, increase convenience and customer satisfaction.

As a result, BAC A BANK's pre-tax profit reached over VND1,060 billion, not increasing as sharply as in the fourth quarter but still maintained at approximately the same level as last year. This result is appropriate in the context of businesses trying to recover and the economy's credit absorption capacity being low.

Regarding operational safety indicators, BAC A BANK's liquidity remains stable, although the bad debt ratio has increased to 0.92%, it is still among the lowest in the industry thanks to good risk management capabilities. The Bank's operational safety indicators continue to ensure the limits prescribed by the State Bank.

In addition, in order to improve asset quality as well as create a solid reserve buffer, the Bank has proactively set aside more than VND 152 billion in provisions, an increase of nearly 36% compared to 2022. The Bank's bad debt coverage ratio reached 131% at the end of the year, at a high level according to industry practice (the industry average is 93%).

By the end of 2023, although some targets had not yet completed 100% of the plan set at the beginning of the year, the Bank continued to maintain stable business operations, improve risk management capacity and financial capacity, in the right direction and effectively.

The bad debt coverage ratio reflects the bank's ability to defend against fluctuations related to bad debt issues. Accordingly, the higher this ratio, the more proactive it is in provisioning and managing bad debt to ensure smooth banking operations.