OCB targets 66% profit increase compared to 2023

Orient Commercial Joint Stock Bank (HoSE: OCB) has just announced its audited consolidated financial statements for 2023. Accordingly, pre-tax profit reached VND 4,139 billion.

Compared to the management report, OCB's pre-tax profit decreased by VND 1,088 billion due to an increase in provision expenses of VND 501 billion and adjustments to some income items actually collected from customers in 2023 to be accounted for in 2024.

According to the audit report, OCB's total assets at the end of 2023 were VND 240,114 billion, of which market 1 debt was VND 148,005 billion. The bad debt ratio was recorded at 2.02%.

Explaining the difference before and after the audit, OCB said it had proactively set aside additional provision costs to increase the credit risk reserve fund buffer.

According to OCB, in recent years, the domestic economy has faced many difficulties due to the impact of the COVID-19 pandemic, declining import demand from international markets as well as geopolitical tensions in the world.

This has caused many businesses to fall into difficulty, workers to lose income, thereby affecting customers' ability to repay debts.

Although the method of receiving collateral to replace debt repayment obligations is permitted by law, its implementation is lacking in consistency and synchronization between localities and relevant agencies due to problems in the registration and updating of changes on land use rights certificates and assets attached to land.

Accordingly, the accounting for related loans also has many conflicting views from many sides, even though the customer's debt obligations are determined to have ended upon completion of the handover of collateral. On that basis, along with the principle of prudence in management, OCB has proactively set aside additional provisions for these debts for which collateral has been handed over.

OCB leaders also added that the adjustment of some income items actually collected from customers in 2023 will be completed and recorded in this first quarter.

At the same time, the bank has reduced the customer debts by more than 50% for which collateral has been handed over to replace the debt repayment obligation, so far, the bank has processed and reduced the additional provision for these assets at the end of 2023. Accordingly, the business results in the first quarter of 2024 are expected to improve significantly.

OCB has also just announced documents for the 2024 Annual General Meeting of Shareholders, aiming to increase its charter capital by VND4,168 billion, including the issuance of shares to pay dividends to existing shareholders at a rate of 20%. If successful, OCB's charter capital in 2024 will increase to VND24,717 billion.

In addition, the bank also presented this year's business plan to the congress, with the target of total assets increasing by 19%, pre-tax profit reaching VND 6,885 billion, up 66% compared to 2023. The meeting will be held on the morning of April 15 in Ho Chi Minh City .

Source