Military Commercial Joint Stock Bank (MB - HoSE: MBB) has just announced its consolidated financial report for the first quarter of 2024 with net interest income reaching VND 9,062 billion, down 11% over the same period last year.
However, the bright spot is that the bank's non-interest income still recorded positive results when net operating profit increased by 37% to VND945 billion. Net profit from foreign exchange trading activities reached VND461 billion, up 24% over the same period.
Notably, MB's investment securities trading and capital contribution and long-term investment activities also brought in a net profit of nearly VND965 billion, an increase of 61% compared to the profit of VND37 billion in the same period last year.
Only net profit from other business activities of the bank decreased by 22% compared to last year to 364 billion VND.
During the period, the bank also reduced operating costs to VND3,514 billion, down 2% compared to the cost of nearly VND3,568 billion in 2023.
However, the bank's risk provisioning costs increased significantly. Specifically, in the first quarter of 2024, MB set aside VND 2,707 billion for credit risk provisioning, an increase of 46.4% over the same period. As a result, MB reported pre-tax profit of VND 5,795 billion and after-tax profit of VND 4,624 billion, both down 11% compared to the first quarter of 2023.
Recently, MB's 2024 Annual General Meeting of Shareholders approved the target of pre-tax profit growth of 6-8%. With the achieved level in 2023 of VND 26,306 billion, MB's consolidated pre-tax profit in 2024 is expected to reach from VND 27,884 billion to VND 28,411 billion.
At the congress, giving the reason for setting such a target, Mr. Luu Trung Thai, Chairman of the Board of Directors of MB, said that in 2023, the NIM of the whole industry will decrease. In 2024, the NIM provision will decrease and credit growth will be low. Normally, in the first quarter of each year, credit growth will reach 4-5%, but this year it has not increased, up to now it has only increased by about 0.23%.
The industry-wide bad debt ratio is estimated to double in 2023, leading to increased pressure on bad debt provisions. Therefore, the board of directors has proposed a safe and cautious plan in setting targets.
As of March 31, 2024, MB's total assets were recorded at VND900,647 billion, down 5% compared to the beginning of the period. Of which, gold deposits and loans to other credit institutions reached VND77,809 billion, up 68% over the previous year. Customer loans reached VND615,316 billion, up slightly by 1% compared to the first quarter of 2024.
On the other hand, MB's customer deposit balance reached VND558,826 billion, down slightly by 2% compared to the first quarter of last year. Notably, MB's deposits at the State Bank recorded a decline from nearly VND66,322 billion to nearly VND11,916 billion.
Regarding loan quality, at the end of March 2024, MB's total bad debt was about VND 15,294 billion, an increase of 56% compared to the bad debt level of VND 9,805 billion in 2023. As a result, the ratio of bad debt/loan balance increased from 1.6% to 2.49%.
MB's annual general meeting of shareholders also approved the use of VND10,613 billion to pay dividends to shareholders, with a total rate of 20%. Of which, MB will spend VND2,653 billion to pay cash dividends at a rate of 5%. At the same time, it will spend VND7,959 billion to pay stock dividends at a rate of 15%, helping to increase charter capital accordingly.
In addition, the congress also approved the increase of charter capital by more than VND8,579 billion. Accordingly, in addition to increasing capital by VND7,959 billion by paying dividends in shares, MB continues to plan to issue an additional 62 million shares privately, equivalent to an increase of charter capital of VND620 billion.
The implementation period is from 2024 to the second quarter of 2025. Previously, the bank completed the private issuance of 73 million shares to two shareholders, SCIC and Viettel. After completing the above two capital increase plans, MB's charter capital is expected to increase to VND61,643 billion .
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