TECHCOMBANK IN RETAIL PUSH

Vietnam’s second-biggest listed lender to continue shift towards retail and mortgages

VIETNAM’S Techcombank, fresh after raising US$922 million (RM3.67 billion) from global investors, aims to expand aggressively into retail banking to capitalise on booming demand for an array of financial services, said its senior executives yesterday.

“On the lending side, we are having an increasing orientation towards retail, a disproportionate amount of which would be mortgages,” said chief financial officer Trinh Bang.

The 25-year-old bank, formally Vietnam Technological & Commercial Joint Stock Bank, was seeing strong growth in services such as credit cards, auto loans and bancassurance, said Trinh.

The comments come after the Hanoi-based lender priced its April initial public offering (IPO) at the top of a marketing range, valuing it at US$6.5 billion and making it Vietnam’s secondbiggest listed bank after statecontrolled Vietcombank.

Cornerstone investors included Singaporean sovereign wealth fund GIC Pte Ltd, Fidelity Management & Research and domestic fund Dragon Capital. Together, they bought 76 per cent of shares offered in the IPO — one of the largest amounts among Vietnam IPO cornerstones.

Techcombank’s appeal stems from a boom in financial services while the economy expands at record rates.

Vietnam reported annual credit expansion of about 18 per cent for the past two years, with banks posting strong profit growth.

A manufacturing boom spurred the export-dependent economy to grow 7.4 per cent in January-March — the fastest first-quarter pace in a decade — after growing 6.8 per cent last year.

“Our strategy is very much in line with changing demographics and the growing affluence of young professionals,” said chief executive officer (CEO) Nguyen Le Quoc Anh.

The bank, which will list its shares on the Ho Chi Minh Stock Exchange on Monday, expects mortgages to make up a key portion of lending growth as it focuses on Vietnam’s expanding workforce, which is seeing a rise in disposable income.

“Over the next two to three years, key for us is to continue shifting towards retail and mortgages.

“The rationale is that mortgages are safest in terms of provisions and give us the highest return on risk-weighted assets,” said the CEO.

Techcombank expected retail lending to grow to 50 per cent of total loans over the next two to three years from 40 per cent, he said.