Techcombank chairman says property loans given only for legally sound projects
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Techcombank’s real estate loan portfolio might be big but most are personal loans or to develop projects that do not face legal issues, its chairman, Ho Hung Anh, said.
At the lender’s annual general meeting on April 22 he said since the property developments have full legal status, even “in the current difficult period for the property market, these projects are being implemented.”
Masterise, one of Techcombank’s clients, is proceeding with its projects normally and its construction is on schedule, he noted.
As of the end of last year loans to the property and construction sectors represented 29% of Techcombank’s loans outstanding.
The bank also has exposure to these sectors in the form of corporate bonds, which make up 6% of its total assets.
“The bond market will recover,” Anh said, assuring that when this happens, Techcombank’s growth would resume very quickly.
Last month ratings agency Moody’s Investors Service downgraded the long-term deposit and issuer ratings of Techcombank because of its high exposure to the struggling property sector.
Techcombank targets pre-tax profits of VND22 trillion (US$932.2 million) this year, down 14% from 2022, and a bad debt ratio of below 1.5%.
Its outstanding loans are expected to surge 15% to more than VND510 trillion by the end of the year.
The bank does not plan to pay dividends this year.
Questions & Answers
Q.What is the primary reason for Techcombank's chairman expressing confidence in their property loan portfolio?
What is the primary reason for Techcombank's chairman expressing confidence in their property loan portfolio?
The chairman stated that most real estate loans are either personal or for development projects without legal issues. He noted that these projects have full legal status and are being implemented even in the current difficult market period.
Q.What percentage of Techcombank's loan portfolio is currently exposed to the property and construction sectors?
What percentage of Techcombank's loan portfolio is currently exposed to the property and construction sectors?
As of the end of last year, loans to the property and construction sectors represented 29% of Techcombank's outstanding loans. The bank also has additional exposure via corporate bonds, which are 6% of its total assets.
Q.Why did Moody's Investors Service downgrade Techcombank's ratings recently?
Why did Moody's Investors Service downgrade Techcombank's ratings recently?
Moody's Investors Service downgraded Techcombank's long-term deposit and issuer ratings last month. This decision was made due to the bank's high exposure to the struggling property sector.
Q.What is Techcombank's financial target for pre-tax profits this year, and how does it compare to the previous year?
What is Techcombank's financial target for pre-tax profits this year, and how does it compare to the previous year?
Techcombank aims for pre-tax profits of VND22 trillion this year, which is a 14% decrease from 2022. The bank also targets a bad debt ratio of below 1.5%.
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