Techcombank and Manulife officially "going their separate ways" has ended a 7-year relationship (since September 2017) despite the 15-year cooperation agreement.

At the meeting with individual investors and sharing of business results for the first 9 months of 2024 of Techcombank, held on October 23, Ms. Nguyen Thi Thu Trang - Senior Director of Corporate Finance Management, Finance and Planning Division, Techcombank, said that Techcombank and Manulife have officially ended their exclusive distribution relationship of insurance products from October 14, 2024.

With this decision, Techcombank has paid Manulife 1,800 billion VND. The payment is recorded in the bank's financial report for the fourth quarter of 2024.

Ms. Nguyen Thi Thu Trang affirmed that the VND 1,800 billion compensation to Manulife will not affect Techcombank's 2024 profit plan.

“We are confident that we will achieve the profit approved by the General Meeting of Shareholders in 2024. This agreement opens up new opportunities for the bank to redefine its insurance strategy in the coming time, in order to optimize benefits for shareholders,” said Ms. Trang.

Sharing more about this, Mr. Nguyen Anh Tuan, Director of Retail Banking, informed that the bank still ensures all conditions as well as service quality for customers who have purchased life insurance through Techcombank.

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Techcombank terminates cooperation with Manulife. Photo: Hoang Ha.

Mr. Tuan also revealed the reason for ending the cooperation between Techcombank and Manulife. "Due to changes in the Law on Insurance Business, the two sides decided to terminate. This opens up the next business opportunity and we believe that it will bring many prospects for Techcombank from now on," said Mr. Tuan.

According to Mr. Tuan, fee collection is always an important area that Techcombank focuses on the most. In the first 9 months of the year, the bank's service fee income reached nearly VND8,300 billion, mainly from investment banking fees and insurance fees. This shows that the bank is still finding a different direction in the most difficult period of the market.

Mr. Nguyen Anh Tuan assessed that the life insurance market in Vietnam still has many great opportunities. 80% of Techcombank's customers said they are very interested in life insurance, so this is still the bank's core area. There are many interested partners and Techcombank will focus on determining the cooperation model with partners in the coming time.

Notably, Mr. Tuan informed that in early October 2024, Techcom Non-Life Insurance Company (TCGIns) was established, in which Techcombank contributed 11% capital.

The above sharing partly reveals the possibility of a new insurance service development strategy in the near future of Techcombank. It is not excluded that the bank will sell life insurance to customers through a newly established company. This move is completely similar to VPBank when it recently supplemented its banking service ecosystem with OPES insurance, an insurance brand under VPBank.

Although Techcombank did not record any unusual fee income in the third quarter compared to the second quarter, fee income in the first nine months of the year increased by 17%. Of which, insurance service fees increased by 30% over the same period.

Regarding the overall business results of the first 9 months of 2024, Ms. Nguyen Thi Thu Trang said that Techcombank's pre-tax profit increased by 24% over the same period, reaching VND 22,800 billion, equal to the pre-tax profit of the whole year of 2023.

Notably, the bank's CASA ratio (non-term deposits/total mobilized capital) continued to be the highest in the industry, reaching 40.5% as of the end of September. A notable detail is that as of the end of September, all of Techcombank's payments via Napas ranked No. 1 in the market in both incoming and outgoing payments.

In the context of rising customer deposit interest rates in the third quarter, maintaining a very high CASA ratio and low-cost passive income accounts helped reduce cost pressure for the bank.

In terms of asset quality, the bank's provisioning expenses in the third quarter reached VND1,100 billion (VND1,600 billion in the second quarter). Bad debt continued to remain below 1.5%, which is also the bank's target threshold, while the bad debt coverage ratio increased slightly to 103%.