HDBank’s faith in ESG pays off for partners and customers
HDBank is pioneering the internationalisation of its governance practices and is benefiting from the steadfast support of seasoned shareholders and investment funds. reports.
HDBank’s AGM has reinforced shareholder confidence in its strategic goals as the bank nears its 35th anniversary, underscoring a legacy of sustained high growth.
During the bank’s AGM on April 26, representatives from global investment funds highlighted its strengths and values. Reflecting on performance in 2023, shareholders commended the Board of Directors for their leadership. HDBank achieved its highest financial results to date, marking the second year under the chairmanship of Kim Byoungho.
By the end of 2023, HDBank had surpassed all its targets, with total assets reaching VND602 trillion ($25.1 billion), a 44.7 per cent increase from 2022. Total deposits grew to VND536 trillion ($22.3 billion), up 46.5 per cent.
Credit growth exceeded VND353 trillion ($4.7 billion), a 31.8 per cent rise, while pre-tax profit surged to VND13.017 trillion ($542.4 million), a 26.8 per cent jump.
This stellar performance boosted the return on assets to over 2 per cent and the return on equity (ROE) to 24.2 per cent, maintaining market-leading efficiency. Additionally, the capital adequacy ratio stood at 12.6 per cent, well above the State Bank of Vietnam’s requirements, while the non-performing loan ratio remained at a low 1.5 per cent, underscoring strong financial stability.
HDBank’s stock is included in the Ho Chi Minh City Stock Exchange’s VN-Diamond Index, and has maintained its position in the Sustainable Development Index. The bank also garnered significant accolades last year, including the Board of the Year award from the Vietnam Institute of Directors and two major awards in the 2023 Outstanding Listed Companies Selection.
Beyond its core business activities, HDBank has advanced strategic initiatives such as digital transformation, comprehensive Basel III implementation, and robust customer support programmes.
“These positive business results reflect the bank’s proactive and flexible approach, as well as its ability to capitalise on opportunities amidst challenges,” Byoungho highlighted. “HDBank continues to enhance risk management and corporate governance by implementing Basel III standards and environmental, social, and governance (ESG) initiatives, ensuring full regulatory compliance while striving to adopt the best international practices and uphold commitments to shareholders.”
At the AGM, Fernanda Lima, a representative from Leapfrog Investments, praised the leadership of Vietnamese enterprises, particularly female leaders like Dr. Nguyen Thi Phuong Thao, HDBank’s permanent vice chairwoman.
“Leapfrog has actively collaborated with HDBank on ESG development and credit programmes for female customers. In 2024,” Lima said. “We commit to further enhancing support for HDBank, focusing on solutions, products, and effective governance, particularly in green growth investment, the agricultural and rural sectors, female-led enterprises, and community initiatives.”
Junjie Tong, a representative from Affinity Equity Partners, also commended HDBank’s sustainable growth.
“With a profit growth rate of over 25 per cent, HDBank is clearly performing exceptionally well. During our investment in HDBank, we have witnessed remarkable growth. The shareholders commend the Board of Directors for their outstanding performance,” noted Tong.
Shareholders thrilled
HDBank has captivated shareholders with its robust growth outlook and enticing dividend strategy, targeting a 30 per cent payout for 2024. It aims to achieve a pre-tax profit of around $660.5 million, marking a 21.8 per cent rise from 2023, with a projected ROE of 24.6 per cent.
The bank’s 2024 blueprint includes surpassing $29.2 billion in total assets, a 16 per cent increase, and boosting total deposits to over $26 billion, also up 16 per cent. Credit growth is forecast to exceed $18.3 billion, in line with set credit growth targets.
CEO Pham Quoc Thanh outlined the bank’s 2024 vision, stating, “The banking sector will face numerous challenges, but we see significant opportunities arising from our past achievements. HDBank is positioned to leverage these opportunities, continuing our steadfast commitment to building a robust, comprehensive, efficient, and sustainable system to meet our objectives.”
He highlighted the bank’s focus on sustaining its growth trajectory, particularly through digital transformation, and executing a five-year strategic plan.
In 2024, HDBank will advance strategic transformation programmes aligned with development goals, enhance Tier 1 and Tier 2 capital to support projected business needs, and persist with the Current Account Savings Account action plan to significantly improve ratios, thereby optimising capital costs.
Thanh said, “HDBank has a tradition of setting ambitious business plans and consistently meeting or exceeding shareholder expectations. Over the past decade, despite market volatility, the bank has maintained high and sustainable growth, fulfilled shareholder business plans and never disappointed them. This is a critical foundation for the bank’s confidence in navigating future challenges.”
In Q1 this year, HDBank achieved over $166.7 million in pre-tax profit, a 46 per cent on-year increase, aligning with the plan. The result has elevated ROE to 26.2 per cent, reinforcing its status as one of Vietnam’s most efficient banks, Thanh added.
Regarding profit distribution, the AGM approved a 30 per cent dividend for 2023, to be disbursed in 2024, comprising a 10 per cent cash payout and 20 per cent in stock dividends, an increase from the previous 15 per cent stock payout. This positions HDBank as a leader in high and consistent dividend payouts within the banking sector.
Concurrently, HDBank also unveiled plans to raise its charter capital to more than $1.46 billion.
Petri Deryng, founder and managing director of PYN Elite Fund, lauded HDBank’s consistent high growth, stating, “HDBank’s performance over the years has shown a very high growth rate. We are confident in HDBank’s strategic vision and its unwavering commitment to sustainable development.”
Betting on ESG aspects
With extensive experience from his tenure as CEO of Hana Bank, chairman Byoungho is driving HDBank towards pioneering international governance standards and effective ESG implementation within Vietnam’s banking sector.
As one of Vietnam’s pioneering banks in drafting a sustainability report, HDBank established ESG policies and environmental and social risk management regulations in 2023 in order to enhance sustainable banking practices.
“This year, HDBank will robustly implement full ESG reporting, aiming to achieve our net-zero bank target. With an independent board, we continue to make significant contributions to social activities, especially in developing financial products for women-led smaller businesses,” Byoungho said.
HDBank will prioritise advancing strategic initiatives such as developing a green growth strategy, promoting sustainable finance, implementing effective ESG practices, enhancing the green credit framework, and expanding partnerships with international organisations, financial institutions, and domestic authorities to foster green credit and sustainable finance, CEO Thanh added.
Marc Oliver Juenemann, representing DEG, a development finance institution under Germany’s KFW Bank, expressed confidence in HDBank’s governance-centric approach. “With a strong emphasis on ESG and governance issues, we believe governance is key to creating value for shareholders and strengthening institutions. Our expertise in corporate governance is central to our support for HDBank’s forward-looking initiatives,” he stated.
Meanwhile, vice chairwoman Phuong Thao reflected on HDBank’s decade-long journey of innovation and sustainable growth.
“After more than 10 years of renewal and moving towards 35 years of sustainable development, HDBank has clearly defined a strategic vision to become a dynamic and modern retail bank, pioneering digital products and services in Vietnam. We aim to be a happy and humane bank, leading in community and social welfare activities, promoting business trends for vulnerable groups,” Dr. Phuong Thao said.
“I am proud of our strong progress in promoting sustainability and corporate social responsibility. By integrating ESG standards into our business practices, we not only create long-term value for shareholders but also make a positive impact on our community and globally,” she added.
Dr. Phuong Thao, who was trained in banking overseas, became Vietnam’s youngest female banking expert to hold senior management positions at the country’s earliest joint-stock commercial banks at the age of 26. Her investment and co-founding efforts have been integral to the development of Vietnam’s private joint-stock commercial banks for nearly 30 years.
One strategic investor who has significantly influenced HDBank’s high and sustainable growth over the past decade reaffirmed the commitment of stakeholders. “The steadfast support and commitment of organisations, funds, and investors have been pivotal, driving HDBank towards higher goals and greater successes in the future,” he noted.n
This year, HDBank will robustly implement full ESG reporting, aiming to achieve our net-zero banking targets.
‑ Kim Byoungho Chairman, HDBank