MB Accelerates Digital Transformation in 5-Year Vision

9:41:12 AM | 20/5/2021

The market price of MBB stock more than doubled in a year. The shareholders of the Military Bank (MB) will have another successful year as the bank made a consolidated profit of nearly VND4,600 billion in the first quarter of 2021, more than doubling the value in the same period of 2020. As a leader of digital banking development, MB has many advantages to achieve bigger targets.

One million new users, customer experiences help MB improve performance

MB reported that its Current Account Savings Accounts (CASA) of personal customers in the year to March 31, 2021 grew by up to 1.5 times from a year-ago period when new customers increased by nearly one million. This growth proved CASA's steady growth in the retail segment from 2020 (doubling that in 2019). CASA improves and creates advantages in low-cost capital for its operations.

In the first quarter of 2021, MB made a big step forward when its pretax profit reached nearly VND4,600 billion, equal to 43% of the result in 2020. All indicators performed well in 2020: ROA of 2.7% (versus 1.59% in the first quarter of 2020), ROE of 27.24% (vs 16.09%), non-performing loan ratio of 1.14% and provisional fund greater than 144% of nonperforming loan.

Previously, in 2020, MB made an outstanding success as the customer base increased marvelously, reaching 90 million electronic transactions recorded, three times higher than 2019 and 85% of transactions were conducted digitally. Strong brand and reputation plus its smart digital platform gave MB a special advantage in attracting new customers.

In the international arena, MB was periodically reviewed by two independent credit ratings agencies, Moody's and Fitch. In the context of the Covid-19 pandemic, Fitch Ratings upgraded MB’s Long-Term Issuer Default Rating (IDR) to “Stable”. Furthermore, MB obtained B+ for long-term credit ratings from Fitch and Ba3 from Moody's (similar to that of VCB).

Domestically, MB ranked among Top 30 largest companies in Vietnam on the VNR500 rankings and Top 6 listed companies by market capitalization on the Vietnamese stock market (according to IR Awards 2020). For shareholders, while people were struggling with unexpected difficulties, MB still paid 15% stock dividend for its shareholders in 2020.

Digital acceleration in the 5-year horizon

The leadership vision for digital banking development has helped MB stand firmly in business and deliver value to customers, shareholders and the community. MBBank application, Biz MBBank application and digital lending products have created seamless capital flows in the economy, fostered online business and generated valuable connections (such as API Banking, connecting healthcare, education, transportation and public services); banking services linked to payment ecosystems; digitized savings and lending services, international money transfer, tax payment and customs).

Creating an ecosystem of 20 million sustainable customers

The MB Board of Directors planned to define the ‘most convenient bank’ vision with the business philosophy “Digital acceleration, retail breakthrough and safety and efficiency” in the next 5-year strategy. The bank will strive to become No.1 in digital banking and a Top 3 retail bank in the Vietnamese market. MB will continue to develop into a dynamic financial and banking group and create an ecosystem of 20 million sustainable customers.

The bank’s launch of smart financial products has brought direct experiences with the digital economy that all Vietnamese people must prepare to integrate into the global economy. In fact, the ‘bank account matches telephone number’ program on the MBBank application has attracted great attention from the community and customers.

In the 5-year strategy (2017-2021), MB prematurely completed its target of becoming a Top 5 commercial bank in performance and operational safety. Positioning the vision and goals for the next five years is a big story that will be submitted to the upcoming Annual General Meeting of Shareholders by the Board of Directors.

"A long journey begins with a single step". The foundation built by MB matches the expectations of shareholders and investors. The bank will take quicker and firmer footsteps than its competitors in the market.

By Le Hien, Vietnam Business Forum