Techcombank and the 30-year journey of transformation to create legacy

Powerful transformation journey

Going back in history, Techcombank, a private joint stock bank, established in September 1993, began to gain attention in the late 2000s with new developments. In 2008, Mr. Ho Hung Anh became the 5th Chairman of the Board of Directors of this bank, and from here, Techcombank implemented an impressive transformation roadmap.

In 2009, Techcombank became the pioneer bank in Vietnam to invest a large budget to invite McKinsey - the world's leading strategy consulting group - to accompany in building a professional and effective business strategy and corporate culture according to world standards.

In 2018, Techcombank made a new mark in the Vietnamese banking system when it successfully sold 164.1 million shares to foreign investors at a price of VND128,000/share, earning a total of approximately USD922 million. According to Ernst & Young, Techcombank's IPO was considered one of the three largest IPOs in Southeast Asia at that time.

This IPO attracted the participation of more than 150 investment funds worldwide. Of which, two independent institutional investors managed by Warburg Pincus - the world's leading private equity fund management company specializing in investing in companies with long-term growth potential - poured more than 370 million USD, equivalent to about 8,400 billion VND into Techcombank.

Explaining this huge investment for Techcombank at that time, a representative of Warburg Pincus said: “Techcombank has all the best conditions with its leading position in the retail sector… and will continue to consolidate its leading position in Vietnam to become one of the leading banks in Southeast Asia.” Along with that, Warburg Pincus also sent personnel to join the Board of Directors. Since March 2019, Mr. Saurabh Narayan Agarwal - CEO of Warburg Pincus LLC, has become a member of the Board of Directors of Techcombank.

10 years without dividends to focus on fundamental investment

To date, Techcombank is at the top of the digital transformation banking rankings. World-class partnerships have helped Techcombank acquire superior technology, high-class human resources, and build a highly specialized team within the system. This bank focuses on investing in market research and customer understanding to build solutions - solution packages for each segment and each customer group.

In mid-2016, Techcombank made an impression when it announced its Zero Fee policy - Free of charge for all online electronic money transfer transactions. From a market perspective, many questions arose: "How long can Techcombank persist?", because at that time, revenue from money transfer fees was considered the "golden goose" for banks.

However, Techcombank has been determined to succeed and bring great benefits to customers. The number of Techcombank EBanking transactions increased from 9.0 million in 2016 to 22.2 million by the end of 2017. By 2023, in the second quarter alone, the number of individual customers' transactions via electronic banking channels increased to 499.7 million, while the total transaction value reached VND 2.3 million billion.

It can be seen that Zero Fee and now the Cloud-first policy that Techcombank is implementing have contributed to promoting a larger change process: transforming the way the banking industry works. Following the investment of 300 million USD in the technology system from 2016-2020 (not including personnel costs), Techcombank is currently continuing to pour more than 500 million USD in the 5-year strategy 2021-2025, to pioneer large projects on digital transformation, to build new competitive capacity.

According to the bank's Board of Directors, the 10-year policy of not paying cash dividends, implemented since 2013, has helped the bank accumulate a solid financial foundation to invest in technology infrastructure, serve the interests of capital customers and supplement resources for long-term investment plans. Thanks to that, up to now, Techcombank has maintained the leading position in terms of investment in technology infrastructure, even with an investment level equal to or higher than most other banks in the Southeast Asian region.

Another reason is for the bank's Board of Directors to ensure a growth rate of about 10-20%. According to Basel 2 standards, to be able to invest in additional debt, a bank must have a high level of equity, which is considered a buffer against risks, helping the bank build its reputation in the market, increase its ability to mobilize capital and expand credit, and diversify its loan portfolio. By the end of 2022, Techcombank ranked second in the entire system in terms of equity, with VND 113,424 billion. Along with that, Techcombank is a bank that has maintained a capital adequacy ratio (CAR) of over 15% for many consecutive years.

At the 2023 Techcombank Shareholders' Meeting, Chairman of the Board of Directors Ho Hung Anh revealed that "this could be the last year Techcombank does not pay cash dividends".

“I remember at the 2013 Shareholders’ Meeting, I said that the bank would not pay cash dividends for the next 10 years. This year is the 10th year, and I think this will be the last year that Techcombank does not pay cash dividends. Anything can happen, but the bank will always ensure the rights of shareholders, while also ensuring the bank’s operations,” said the Chairman of Techcombank.

Journey of heritage creation

Thanks to the steadfast implementation of the “Customer-centric” strategy, Techcombank marked the first 6 months of 2023 with a total number of customers reaching 12.2 million, of which approximately 1.4 million new customers were attracted, with a proportion of 45.3% joining through digital channels and 43.8% through partners in the ecosystem. Outstanding experiences and trust from customers have helped the important index of this bank’s current account balance (CASA) grow again, reaching nearly 35% at the end of the second quarter of 2023.

In 2023, Techcombank is also the only private bank representative to appear in the Top 163 most valuable banking brands globally by Brand Finance. Techcombank is also the “Most valuable private banking brand”, Top 8 “Most valuable brands in Vietnam” and Top 18 “Most valuable banking brands in Southeast Asia”. According to Brand Finance, Techcombank is the fastest growing banking brand in Vietnam in 2023, achieving a brand value growth rate of 47%, up to 1.4 billion USD.

At the recent General Meeting of Shareholders, Techcombank Chairman Ho Hung Anh shared: "I always believe that Techcombank's future value will be 5 to 10 times higher than the present."

Recently, Techcombank has joined hands with Hanoi and Ho Chi Minh City to create a leading Marathon with the message "Run for a superior Vietnam". In 2022 alone, Techcombank contributed nearly VND80 billion (about USD3.4 million) to community activities, including supporting disadvantaged ethnic minority communities, sponsoring tuition fees for students, etc. "Techcombank will join hands with the community and the country to create a meaningful legacy for future generations", Ms. Thai Minh Diem Tu - Director of Marketing, shared more.

Doan Phong

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