Vietnam Technological and Commercial Joint Stock Bank (TCB) Earnings Call Transcript

Good afternoon, ladies and gentlemen. Welcome to Techcombank and Techcom Securities Fourth Quarter and Fiscal Year 2025 financial results presentation. Today's session will begin with opening remarks from Jens Lottner, CEO of Techcombank. Following that, Alex Macaire, the CFO, will provide a detailed overview of our financial results and key business updates for Techcombank. Afterward, Mr. Xuan Minh, Chairman of Techcom Securities, who will share detailed insights on TCBS' performance. We will conclude with a Q&A session. Jens, Alex and Xuan Minh will present in English, and a live Vietnamese translation is available via separate link. As usual, there will be a dedicated call in Vietnamese tomorrow for retail investors. Today's presentation and Q&A will last approximately 90 minutes. And with that, I would like to now hand it over to Jens to begin the presentation on Techcombank.

Good afternoon, everyone, and thanks for joining this call. Overall, as usual, we give you the summary of the highlights, and then my colleagues will go into a little bit more detail. And I think it is fair to say that the fourth quarter 2025 was again a very, very strong quarter from all the targets we had set for ourselves. And we again achieved the third consecutive quarter of record earnings as well as profits. So overall -- and if you see the numbers, and there's a little bit of a distortion because in the fourth quarter of 2024, and we took a one-off hit because we separate it with Manulife. And therefore, some of the growth numbers are very, very high. But I think -- and even taking the side effect away, it was a very strong quarter. TOI in the quarter, VND 14.8 trillion and profit around VND 9.2 trillion, which gets us to overall VND 32.5 trillion which is above the guidance we gave to the AGM. The return on assets still at 2.4%, which is amongst the leading banks in Vietnam. NIM has been stabilized at amount VND 3.8%. Again, we've seen the downward trend, but we were still able to maintain it. And from our perspective, at acceptable level given what we've seen around us. And again, operationally, and things are very much under control when it comes to OpEx with the cost-to-income ratio of 30.8%. And in addition to achieving a very, very strong performance measures when it comes to the balance sheet and the quality of the balance sheet, we've seen actually that despite quite a significant credit growth of 18.4%, which is exactly the quota, which has been granted by the state bank, and we've actually seen a reduction in NPLs, but we also increase in our coverage ratio, again, probably different to some of other banks in Vietnam. The CAR has reduced a little bit, and this is partially owned to the fact that we paid dividend in October. And so therefore, we probably lost around 60 basis points there. But again, Alex will give a little bit deeper explanation, but we think it's rather temporary. And then last but not least, on CASA, which we always have focused is one of our key areas and maintains at the top of the industry above 40%. So overall, as I said, I think it's a very strong performance. We will go into more detail and also in the Q&A., but I think it's fair to say that we believe actually we're on the right track. Again, we will not share this time but probably at the AGM in April, much more about our next 5-year strategy. But, I think we're feeling very, very comfortable and very confident that in the next 5 years and with all the changes looming in Vietnam, but probably also in the larger regional context and even global context that we are very, very well prepared and positioned to take full advantage of that and that we will -- and based on all the foundations we have created and the results which we're seeing already that we're actually able to accelerate that trajectory going forward. With that, let me hand it over to Alex, who will go into the details.

Thank you, Jens, and good afternoon, everyone. So as usual, we will start with a brief overview of the macroeconomic context. The way I would summarize it is a very solid performance of Vietnam in complex and volatile economic and geopolitical environment. The GDP growth achieved 8% for the full year and 8.5% for the fourth quarter in isolation. I think this very strong performance shows actually how Vietnam is benefited from the continued reorganization of the supply chain, a bit like what happened a few years ago during the first wave of tariffs imposed on China and also the growing competitiveness of the Vietnamese economy and its capacity to meet more stringent requirements in terms of green energy, in terms of traceability, et cetera. There was also in 2025, strong support from domestic consumption and tourism. Therefore, a strong -- very strong performance across the board, although it might have also benefited from some front-running of import orders in the U.S. ahead of the imposition higher tariffs. And therefore, I would say 2026 will be the real test of the capacity of Vietnam to continue to grow at an elevated pace. I think the main challenge remains on the monetary side. As you can see, assets continue to grow a lot faster on deposit, 19% versus 13.7%. This is pushing up on the LDR in the banking system and therefore, also creating pressure on interest rates. So there is no reason why there would be such a big disconnect between the growth of the assets and the growth of the deposits. Usually, when it happens, it's because part of the money is kept in banknotes or invested abroad. And in this respect, it's likely that the recent changes in tax law and the fact that all merchants now have to issue invoices was one of the drivers behind this monetary pressure that we are seeing at the moment. And therefore, in the coming quarters, as people get used to the new tax environment and accept the new rules, we can accept -- expect some of this pressure to ease a bit. I will move now to the overview of the results. I think Jens mentioned the key points. So we hit a new record high on PBT at VND 9.2 trillion, which is up 19.5% on 2024 -- the fourth quarter of 2024. And as Jens reminded us, this is also a quarter when we recorded VND 1.8 trillion payment to Manulife for the discontinuation of our banca distribution partnership. If you look at the full year, then our PBT reached VND 32.5 trillion, which is 103% of the AGM target communicated to the market. Our TOI grew by 13.6% with very robust upper single-digit growth in both fee income as well as net interest income. I would also mention very prudent control of operating and provision expenses, which further supported our profitability as well as the one-off recorded in other income in the fourth quarter of 2025, which is linked to the successful completion of one of our real estate projects. Moving now briefly to our Wealth business. I think Techcombank -- Techcom Securities has been once again an important driver in our performance in this business this quarter. So Xuan Minh will present more about that. But I would say we have recorded stellar performance across the board. You can see that the assets under management grew by 86% year-on-year and the number of affluent customers progressed by 74%. At the same time, our cost-to-income ratio continued to improve very significantly from 14.4% -- 41.4% in the fourth quarter of '24 to 32.1% in the last quarter. So this is a very significant improvement, which shows the benefit of scaling up -- continuing to scale up our customer franchise. So looking now a bit more -- in a bit more details at the formation of our NII. The first key point, our interest-earning assets grew by 20% year-on-year. Meanwhile, our -- mobilizing from customers grew even more rapidly at 23% and grew by around 9% quarter-on-quarter. At the same time, we faced a context of tight liquidity, as I mentioned earlier, particularly in the fourth quarter. As a result, we had to pay more on our deposits, and this is translating in an increase in our cost of funding from 3.4% in the third quarter '25 to 3.6% in the fourth quarter. So this is not a surprise. We anticipated it in our last analyst presentation, and we expect that this trend will continue at an even higher pace in the first quarter of '26. Meanwhile, I think the picture on the asset yields was a lot more positive. In the last quarter, if you remember, we managed to stabilize our asset yields. And this quarter, we managed to increase it a bit from 7% to 7.1%. And we expect also this trend to continue into 2026, particularly as the credit quotas might be a bit tighter, forcing banks to be more selective [Technical Difficulty] that our NIM, as Jens mentioned, stabilized at 3.8%. Now if we look ahead, so I said cost [Technical Difficulty]. So what does it mean to the NIM? So the reality is that the average duration on our assets is longer than that of our deposits, which means that the pricing adjustments on the asset side take longer deposit. This is why we are expecting a short-term pressure on our NIM, which could come down a bit in the first quarter before recovering in the second half of the year with the last 12 months NIM stabilizing around -- in the range of 3.6% to 3.8%. So all in all, I would say, short-term pressure on the NIM, but expectation that over the full 2026 year, the NIM will stabilize around the same level as now. So this looks at our asset growth in a bit more detail. The key element for me is the continued progress on diversification. So we managed to grow our retail loans by 9% quarter-on-quarter. And at the same time, our corporate loans and bonds reduced by 2% overall. So this means we continue to deploy more and more of our capital towards the retail segment, which is the strategic segment for us, as you know. I also would mention the slight increase in the proportion of medium- and long-term loans this quarter. So this is linked to the rapid expansion of our mortgage books. And for these books, in particular, we have already implemented some adjustments to our pricing strategy in order to avoid the erosion of our NIM. We're also working on cross-selling activities in order to make up for the NIM stress I mentioned earlier. Portfolio diversification. Again, I think one of the key points this quarter is the fact that we have been able to reduce the proportion of our real estate assets to 56% of our corporate books and 31% of our total credit book. As you are probably aware, most of our competitors at the same time are following the exact opposite direction, increasing their exposure to the real estate sector, sometimes very significantly. And as a result of that, I think it's probably fair to say that we are now increasingly getting close to the industry norm in terms of the proportion of our assets invested in -- mobilized in the real estate sector. The other point, obviously, was the very rapid progression of retail loans in this quarter. As I mentioned, this was largely driven by mortgages, but we also continued to record some stellar performance in margin lending and unsecured lending. So growth rates, as you can see, were 5% and 24% quarter-on-quarter, respectively, and 69% and 248% on a year-on-year basis. So there are several drivers behind this very strong performance. The first one is the continued expansion in our equity brokerage market share. So Xuan Minh will talk to that a bit later. The fact that we have also transferred the SME segment to the retail bank, allowing a much better coverage of those customers. Our investment also in continued improvement in AI and machine learning underwriting processes. And last but not least, design also of new and innovative propositions catering to the need of micro SME and merchant customers. Looking now at the real estate sector, you can see we had a record quarter in terms of mortgage disbursement, so exceeding for the first time, VND 40 trillion. There is also a very clear recovery in the real estate market in terms of supply of condo apartments, then actually Hanoi and its region remained at a 5-year high, continuing to improve over 2024. The supply in Ho Chi Minh City almost doubled year-on-year on the back of effort from the regulatory authorities to unblock some of the projects, which were still frozen. And very importantly, absorption rates remained close to 100%. So I think this makes for a very healthy operation of the real estate market. And meanwhile, we can see that interest -- the prices in the North, prices in Hanoi region continue to catch up with the South, even edging ahead actually of Ho Chi Minh City in terms of the primary market. So this is good because it means that the market has now find a balance, both in terms of supply versus demand, but also in terms of the North versus the South. Looking now at our deposit [Technical Difficulty] very strong CASA ratio at the top of the industry, as Jens mentioned, 40.4%, decreasing a little bit from Q3. At that time, if you remember, we had at 42.5%. And the main reason in the context I described earlier, erosion in liquidity in the overall banking system, partly driven by the changes in the tax law. However, we still managed to grow our CASA, including Auto-earning balances by 17% year-on-year. So Auto-earning was clearly a very important driver of this impressive performance. But then beyond that, we're also benefiting from a very strong new-to-bank customer acquisition, 2.7 million new customers and also our improved capacity to convince these new customers to use Techcombank at their main transaction [Technical Difficulty] Auto-earning as well as new-to-bank acquisition amounted to roughly 50% of our CASA growth this year. Turning now to fees. So overall, I mentioned earlier, 8% year-on-year growth in fees. This also includes a very important factor I mentioned in previous analyst presentations, which is a change in regulatory and accounting rules, which had a very significant and adverse impact on cards and on letters of credit business, then actually our fee income will probably have been showing a growth of around 15%. Important point to note is obviously, there are offsets elsewhere in NII or provisions. And therefore, the net impact on PBT of those changes in regulations, either tax or -- either accounting or regulatory was neutral to PBT. So very strong performance in IB fees, plus 21% year-on-year, and Xuan Minh will talk to that. I would also mention, obviously, a 92% year-on-year growth in our banca fees, very impressive. This year, as you know, we changed our approach or changed our strategy. And in the last quarter of the year, we also started piloting the sale of products directly manufactured by our in-house subsidiary, Techcom Life. So this is the first time that Vietnamese people have the opportunity to buy the products from an insurance company, which is 100% domestic, fully privately funded and linked to a banking group with unique investment capabilities. And therefore, it's not surprisingly, the customer feedback that we have received was overwhelmingly positive. I would also call out the very strong performance on FX, plus 37% year-on-year, and this performance was attributable to revamped and very convincing propositions, particularly on the retail side. Costs, so as you know, the third and especially the fourth quarter of the year is usually a bit heavy on costs for reasons which have to do with seasonality, particularly for marketing, for communications and for CSR activities. However, in Q4 '25, so this year, we managed -- we found opportunities to optimize our costs in staff costs and marketing. And as a result of that, we contained the year-on-year growth in our cost to plus 7%, which compares to plus 13.6%, if you remember, for our TOI. So this means that our cost-to-income ratio improved quite meaningfully from 32.7% in 2024 to 30.8% in 2025, which is at the lower end of our target range of 30% to 35%. Asset quality metrics remain very strong. As you can see, our cost of risk on the last 12 months basis stabilized around 0.6% and actually 0.4% net of recoveries. Meanwhile, our NPL ratio improved further from 1.23% to 1.13%. We are seeing very encouraging trend, particularly in our mortgage book. So a number of the one-off cases we mentioned in previous quarters in our mortgage portfolio have now been worked out and leading to a significant decrease in NPL ratio. I will also mention the continued increase in our coverage ratio, which make us an absolute outlier in the industry, most of our peers, around 70%. I mean, if we focus on private banks only. And you can see that our coverage ratio in the fourth quarter of '25 actually stood at 128%. Also another slide, which gives a bit more details on the -- our credit cost and NPL. I think the key point for me is the fact that both bucket 2 balances as well as NPL balances reduced this quarter and this despite the significant growth in our credit books. So you can see that the reduction quarter-on-quarter is of 8% for NPL and reaches even 23.5% for bucket 2. So this is very encouraging and confirm the fact that we have maintained a very conservative approach to risk underwriting during the whole year. Capital and funding. So our capital adequacy ratio, Jens mentioned it, reduced to 14.6% in the fourth quarter of the year, primarily as a consequence of the payment of around VND 7.1 trillion in cash dividend. You can see, however, that our leverage ratio remains extremely low at 6.6%. This is almost half the industry average. Meanwhile, we maintain mobilizing from customers at around 74%, which is very healthy. So my overall take is that the funding and capital position of Techcombank is probably as strong as it has ever been. Quick glimpse into how our performance compares to [Technical Difficulty] you can see, we continue to outperform the market across all metrics. And in a number of areas, actually, the gap to our peers is starting to widen again. Okay. Moving now to the forecast for 2026. Obviously, we remain very bullish on the Vietnamese economy. We believe that it can again grow at an 8% clip in 2026. And there are several reasons. We believe that. First, the enhanced fiscal policy with increased disbursements from the government, strengthened domestic consumption supported by initiative from the government that -- an increase in regional minimum wage, personal income tax amendments and so on and so forth. FDI inflows should continue to be sustained as the Vietnam continues to maintain a stable geopolitical macroeconomic and political environment. Also initiatives from the government such that free trade zones and international financial centers also come to fruition. We're also prudently optimistic on exports. We believe that Vietnam will continue to benefit from a favorable position against its peers in terms of tariffs from the U.S. However, we recognize at the same time that the situation is complex, and we will monitor particularly closely how the U.S. -- the stance of the U.S. with regard to transshipment tariffs. Okay. Looking now at our guidance for the full year. First, our credit growth will be in line, obviously, with [Technical Difficulty] we receive from the Central Bank. We have received so far 12% quota. However, we believe that the quota for the full year will be very strong and higher than that, given our business performance and also given our asset quality. Our cost of funds clearly will go up for the reasons I mentioned earlier. However, we will look to contain that increase. CASA ratio has potential for continuing to improve due to Auto-earning 2.0, our expansion into merchant banking and transaction banking. The NIM should stabilize around 3.8%. And I recognize at the same time that there is some downward -- potential downward pressure to this forecast. But at this stage, let's say, around 3.6%, 3.8%, hopefully closer to 3.8%, our NII growth should obviously be very significant double digit if NIM stays broadly stable and our credit continues to grow close to 20% and obviously, the NII will grow very meaningfully. NFI growth should also be on top of what we saw in 2025. Reason for that as the effort we are making to increase cross-selling and also the opportunity we will have from 2026 to reach a higher performance in the insurance and investment banking areas. Xuan Minh will present his plan in this respect in more details very soon. Cost-to-income ratio will clearly remain in the 30% to 35% band. NPL will be managed below 1.5% and credit costs will be managed below 1%. I will now very briefly talk a little bit about how we see 2026. So clearly, the banking sector will face some headwinds in terms of elevated loan-to-deposit ratios, in terms also of pressure on deposit rates. However, we see a number of positives on the economic side. The government is announcing its intention to continue to step up the public investment disbursements and that should continue to impact very powerfully and positively the economy in 2026. And there are also enhanced regulatory measures to open up new business opportunities for the banking sector for gold as well as for crypto assets. So what are the implications for Techcombank? First, we will continue to diversify our credit portfolio, where we will look for a better risk return mix. So we will increase our exposure to infrastructure and the health care sectors, leveraging the trends and the priorities of the government. And we will obviously continue to accelerate our growth in unsecured lending. Funding structure is obviously a very important priority for us in the context of tight liquidity described earlier. We will look to continue to grow CASA, stepping up new-to-bank acquisition, working on loyalty ecosystem expansion and also increasing the cross-selling of Auto-earning with leveraging the fact that this proposition is still unique in the Vietnamese market. Fee-based income, we believe that there is a strong potential to continue to expand it. We will deepen our expertise and capabilities in capital structuring, bond issuance, supply chain finance. We will aim, as I mentioned, to achieve breakout growth in banca and also develop new fee-generating products in gold and crypto, and Xuan Minh will give more details very soon. And then from an operational efficiency perspective, AI will give us opportunities to streamline our processes and elevate customer experience, and we will obviously leverage this tool to reinforce our OpEx discipline and continue to lead the market in terms of efficiency and particularly in staff productivity. So to wrap up everything before I hand it over to Xuan Minh, 2025 has been another very meaningful year for Techcombank. We managed to grow our PBT by 18%. We exceeded the AGM target. And importantly, we increased our credit risk diversification and further strengthened our credit and overall risk profile. At the same time, I recognize that there are some clear headwinds for the banking sector, the main one between -- main one being the creep up of funding costs and the sustained competition on lending. But at the same time, I believe that the operating and strategic context is even more aligned to the competitive strength of Techcombank. Because as Vietnam continues to pivot towards digital economy, it creates new opportunities for financial innovation, then actually, we will have more opportunities to leverage our dominance in digital banking, our dominance in wealth services, and this will hopefully allow us to accelerate our growth. So it's clearly, I would say, a new era for Vietnam. It's a new era for the banking industry, but it's also an era where we will have a unique and distinctive right to win. With this, I will hand it over to Xuan Minh now for the presentation.

Thank you, Alex. For me, I think it's going to be the same format. I will take a look at the overall market in 2025, then the operation result for TCBS last year. And then looking ahead, what are we going to do for the year 2026. Basically, we had a very good year. The market has a very good year last year, both in terms of return on the stock market and also on the activities for the investment environment in Vietnam in general. Market return about 40% -- more than 40% last year. We have very strong equity trading volume in the market. The margin lending business is also growing very fast for all the companies -- all the securities company in Vietnam. In terms of activities, we have a few major events last year. For example, we have the stock exchange upgrade in terms of trading system, KRX. We have the market status upgrade in Vietnam to emerging market by FTSE. And also, we see a lot of IPO activities in the market when the market is good, then more and more IPO come in. And we also expect that there will be more IPO in 2026 in general. Not only the stock market, also in the bond market, we also see a lot of activities in terms of corporate issuance where we are the leading player in the market. So we are enjoying the trend in general last year. In terms of operation and financial results for TCBS last year, overall, we did very well. We grow about 40%, both in terms of revenue and profit. We have a strong ROA -- we have a strong ROE and we have a very solid cost-to-income ratio. We continue to maintain the lowest cost-to-income ratio in the market in general. In terms of market share, we continue to be the leader in the corporate bond market, both on the corporate advisory and also on the distribution. The wealth distribution business is also growing very fast in the sense that we are introducing quite a number of new products -- new investment product to investors or to our customer in general, and we continue to be the pioneer in introducing a lot of new wealth product for the clients, especially the high net worth and the affluent clients in Vietnam. In terms of stock equity business in general, we continue to be the #1 margin lending leader in Vietnam. We have about 11% market share and is growing about 40% last year. We continue to be the #3 in terms of market share in stock trading in Vietnam. We gained only about 1.3% market share last year. Our objective is about 0.5% every quarter. So we need to try harder. But in general, we try to catch up with the top 2 and soon to become the leader in the market in general. In terms of the business segments, basically, we see on the core business in TCBS has been growing about 40% last year. It's very strong in the investment banking, investment advisory, in the wealth distribution, in margin lending and so forth. So our business across the board has been very, very strong in general. Let me break down -- let me go deeply into each of the individual business. For the bond business in general, last year, we start to see -- we continue to see the growth in terms of new issuance to the market. We are reaching about VND 86,000 trillion in terms of business advisory, which is roughly about USD 3.5 billion in terms of advisory last year, which is very high and it has been the highest since the -- before the crisis in general. So we are getting to the level of the pre-crisis in 2022. In terms of distribution, wealth product, the highlight is that not only we continue to see more and more bond distribution to retail last year, but we start to introduce a lot of more investment product for our investor try to, because [Technical Difficulty] to help them to diversify and also introduce more and more of the investment product that wasn't available in the market, but has been very popular in our developed market, and we try to bring it back to Vietnam and try to introduce to our affluent clients in general. We -- for example, the fund, we have a supermarket fund, we call [ Finmart ] supermarket for all the open-ended funds in Vietnam, and we have been distributing many other funds from other fund house as well. And that has been selling very strongly. We have [ Itracker. ] We have equity structure product and so forth to introduce to the customer last year. And therefore, overall, we see the new business has been growing very strong, about more than 30% last year. And we expect that we will continue to see more and more new product coming out, and that will be also one of the growth driver for us in general on the distribution side. Equity [Technical Difficulty] the market in general, Vietnam has a very good year for the stock market in general. Our market share gained to about 9%, still #3, but we are catching up with other top 2, very fast. Our margin continued to be the #1 with about 11% market share, and we continue to gain more and more and that's also one of the key driver for us in 2026 as well. In terms of balance sheet, we have a solid balance sheet in general. Basically, margin lending has been growing very fast. But to give an idea that in Vietnam, the law is that -- the law allow us to do 2x of our equity. Currently, our margin volume on equity is only about 1x. So we have -- still have a lot of more room to grow this business in general. And another thing is the leverage, how much money we borrow to fund for this margin business in general. Currently, our debt/equity is about less than 1%, 0.8% in general. And therefore, we believe that we still have more room to -- on the debt side, on the borrowing side, on the funding side to fund for the margin lending business in general. ROA, ROE is steady, and we have a lot of more room for the capital adequacy ratio in terms -- for the securities company in Vietnam by law. Cost-to-income ratio is still solid. We continue to try to maintain the lowest level of cost-to-income ratio and try not to increase the ratio in general. And it has been quite steady at about 14% in general last year and probably going forward as well. We continue to show a very strong productivity because of the use of technology, the use of generative AI and so forth in our business and our operation. Productivity per employee continue to be increasing quite dramatically year-over-year. Currently, again, 60% of our staff is actually IT related. Cost per customer is also pretty solid and pretty low, about $20 per customer in general. And last year, we also received a lot of awards both on -- in terms of wealth business and also on the technology business as well. Looking ahead, we continue to see the growth and solid business on all of the segments of our business with the strong economic growth in Vietnam and the market has been -- continued to be opened up in general for new businesses. We see the increase in new bond issuance, very strong in new bond. And we believe that more and more corporate will start to use the capital market for funding -- for their funding in general in the years to come. Wealth distribution, as I said, the key is that we continue to introduce more new and pioneering investment product or investment solution for our -- as a wealth product for our affluent clients, and that has been receiving very well in the market. And we continue to see a strong demand in general. Margin lending, as I said, the market is good. Volume has been increasing quite dramatically overall. So we believe that the margin business continue to grow. And also the brokerage market share, as I said, the target is 0.5% per quarter increase every quarter. Cost-to-income ratio, I also -- we also expect that it's going to be flat or maybe slightly increase in general because we are expanding into quite a new -- quite a number of new business as probably many of you already know, we are looking at core business with -- together with Techcombank, we are looking at crypto business. We are doing P2P. We are doing crowd funding for ECM. We're expanding the ECM business. I think 2026 is probably the year that TCBS started to come into the ECM and institutional sale business for equity in general. We want to be -- or we want to do it a little bit different from our peers in a different way where we believe that we can earn a good profit and to serve better in certain needs that -- from the institutional investor. And that is the new business that we are also coming this year. Again, very short, the new business is still continue to be our strength, introducing new investment product, new wealth product, we try to learn from other development -- developed markets and try to bring it to Vietnam and try to fit it in and offer to our Vietnamese customer. We introduced new product and not only on the equity space, but also on many other new asset classes in general. Then wealth distribution to retail continue to be the focus, and we continue to use technology and also data and data science to somehow to try to reach to more retail investors in general this year, the use of AI, generative AI, fintech stuff to have a better -- to give a better experience for our customer in general. I mentioned about institutional business in general. We try to get into the ECM in a pretty different way. And also we try to serve the institutional investor for stock trading in general, but in a more nontraditional way. For example, we are developing API to connect to our institutional clients, alternative trading platform in general that we try to develop for our institutional clients like pool that we are going to launch it next month. That's also something that we can offer a unique offerings, something that other colleagues may not have in general in Vietnam. And hopefully, that provide more efficiency for our institutional investors and funds. Thank you. And probably I turn back to Jens, and we open up for Q&A.

Thank you Jens, Alex and Xuan Minh. Before we move on to the Q&A session, I'd like to highlight a few notes. Based on feedback to keep the session flowing smoothly, we'll skip the questions related to financial guidance or request for detailed financial metrics that have already been covered in the presentation just now or will be addressed at the upcoming AGM. We kindly ask that you refer to those presentations, which will be posted online shortly after today's event. And of course, the Investor Relations team will always be available to answer any further detailed questions once you've reviewed those materials. With that, let us begin the Q&A session. So the first question is for Jens on a macro background. In the context of continued global uncertainty, Vietnam remains one of the region's strongest performers with high-growth expectations for 2026. Jens, could you please share your view on Vietnam's upcoming economic outlook and how you expect monetary policy to evolve?

Yes. Thank you for the question. I think we talked already about it, and Alex made the comment. So we are envisioning somewhere like 8% GDP growth for 2026. And I think right now as the National Party Congress is basically in session, we see that the target is 10%. And that depends a little bit, right? I think you could probably see a trajectory towards 10%. But again, probably then a lot of things would all need to come together and we see how this would pan out. But if you think about the underlying drivers, so first one is, I think infrastructure will play a very, very important role as the overall economic model restructures, we're getting deeper integrated into global supply chains, and we change and upgrade the production kind of capacity really going much more into intelligent manufacturing, and it's about sustainable investments, et cetera. So there's a lot of money which goes into infrastructure, seaports, railways, et cetera. And I think we have not seen probably that kind of investments in the past. So probably a more expansionary fiscal policy and strong PPPs will probably help on that side. And the real estate sector decreased 75% and 76% have unfrozen a couple of projects. So we should see in this area and actually also getting good momentum, domestic consumption should pick up. Again, I think we've seen a relatively good year 2025. But if the other elements of the economy is in full swing, then usually that would also benefit domestic consumption. Then probably last but not least, you still have FDI and exports. Of course, there is always an uncertainty at this point in time. But overall, what we saw, and we don't believe that Vietnam will structurally get into a disadvantage of other and strongly export-focused countries. And I think so far, it has proven to be very resilient. And we expect that this will actually continue. So if you think about all the component of GDP growth, domestic consumption, investments and export, et cetera, should actually be relatively strong. So therefore, I think that side should be clear. Now what will then the monetary policy do? And I think it will be trying to accommodate. And if we're having such a strong GDP growth, 8% or 10%, we believe that credit growth will also continue to be strong. I think the SPV tries to be a little bit more on caution or except a little bit more caution at this point in time and going and give quarterly guidance, making sure not too much money goes into the real estate sector being and just cautious that there's no bubble coming up. But again, I don't think we will see any disruptive moves. So they will help to basically provide the right context. Of course, monetary policy is a little bit more, how should I say, constrained than the fiscal policy. And as long as you have actually tax revenues and there's still quite a lot of room also on the public debt to GDP. So I think there is room. And on the monetary side, you always have the question of exchange rates and inflation, et cetera. But I think we can still see a path where probably we can get below the inflation target, which is somewhere between 3% and 4% as set by the National Assembly. And probably there is a little bit of depreciation of the down, but let's say, maybe in the 2% to 3% range. And however, we probably expect still a relatively tight environment. And so we expect interest rates to go up a little bit. And we've seen already quite some increases in 2025. Maybe there's another 50 or 60 basis points. But the question is, how will that translate to the asset side. And again, I think it was very, very muted in 2025. I think as the economy is really completely booming, and you will see that credit demand will probably increase and then probably also interest rates or credit yields will also come up, which is why Alex guided a little bit on, yes, there's pressure on the NIM, but we hope that we can basically mitigate the increase in funding costs and we're also seeing that and some of that gets translated to the credit side. So from our perspective, therefore, it is a very conducive market environment. And again, we probably have all the tools at our disposal to take full benefit of that.

Thanks, Jens. This next question is for Alex. And as Jens has alluded earlier, infrastructure development will be one of Vietnam's most significant growth drivers. As the scale of national infrastructure expand, banks are increasingly involved in structuring financing solutions that balance opportunity with prudent risk management. Alex, from your point of view, what competitive advantages enable Techcombank to participate in large-scale infrastructure funding while avoiding overdependence on the balance sheet?

Yes. Thank you. It's a very good question, and it's exactly the kind of question we would ask ourselves before deciding to enter into a specific segment or sector like infrastructure. So the first thing and the first competitive advantage, I would say, the size of our capital base and the strength of our funding base, which allow us to play an anchor role in selective projects, including very large ones if we think it makes sense. Obviously, when extending funding to a project, we would always look at the concentration risk, and we will always look to maintain a diversified risk profile. So how do we do that? Essentially, our philosophy is not to warehouse the risk over the long term on our balance sheet. It's rather to syndicate it out at some point either to start domestic or foreign banks or directly through distribution in the form of bonds to retain investors. But in the end, we will only retain part of the initial exposure on our balance sheet. And obviously, I'm talking about competitive advantage, the fact that we are the #1 in the market in terms of debt capital markets, bond advisory is a critical advantage in this respect. The third point I would make is that whenever we decide to participate in financing a project, we would also look at our cross-selling opportunities beyond the credit dimension itself in the form of cross-selling to the anchor investor in the form of further expansion into the value chain of the project, right? So selling cash management, trade finance products or FX solutions. So how does all of this come together? So essentially, we would look to step in relatively early, so have an underwriting very early in the maturity of the project in order to be able to capture a risk premium, so commending higher interest rate. Then at some point, when the project is ready and mature for refinancing, we would look to sell down part of our exposure either to third-party banks or to retail investors. And at that point, we hope to have made enough progress in terms of cross-selling to be able to offset the loss of net interest income in the form of fees or in the form of interest income on other credit products to the value chain. So this is how we would combine all the strengths of the bank in terms of -- so debt origination, bond advisory and fee cross-selling in order to derive a superior profitability on this activity and avoid the risk of dependency that you mentioned, both from a risk perspective as well as from a revenue perspective.

Thanks, Alex. Next, I'd like to bring in Mr. Xuan Minh from TCBS to address the question on the bond market. Could you please give an update on the key developments in the Vietnam bond market in 2025? And how do you foresee the market in 2026.

Well I mentioned before, our bond [indiscernible] has been very strong last year in 2025, it will grow about 40% -- the whole market grow about 40% in general. A lot more [indiscernible] actually come out to the capital market to raise more bonds funding for their business in general. With the current environment and the macro environment expanding economic growth and also a lot of investment into infrastructure, into private sector, the private sector has been investing into infrastructures as well. And therefore, the demand for funding definitely continued to increase in general, and that would benefit us as an investment banking adviser. So in short, I think the market continues to be strong on the fixed income market in this year.

Thanks, Mr. Xuan Minh. Let's now turn back to bank-specific question topics. Jens, could you walk us through the key profit drivers for TCB in 2026? And additionally, how should investors interpret the bank's NIM outlook for 2026 onward given portfolio expansion into infrastructure and unsecured lending segments that Alex talked about earlier?

Sure. I think the -- if you look through the profit drivers, I think -- and of course, the first one is kind of volume, right, which is ultimately what's the credit quota, which will be granted to us. And again, we assume that whatever the current guidance is, if you think about the need to mobilize capital at this point in time, it's actually very, very high, right? If you want to achieve an 8% to 10% GDP growth and you need -- if you have an inflation rate of, let's say, 4% on top of it, so that gets you to 12% to 14%, you put a credit multiplier on top of it. And you get to 18%, 20% credit growth. So ultimately, then the question is who will help to channel that growth. And I think given our balance sheet strength and the track record of risk management and our ability because of the capital to actually do exactly what Alex has described, taking on big lots in the beginning and then syndicating it out, which would require syndication capabilities, distribution capability. So I think we will actually be getting, again, like what we had in the past, probably over the market average and credit growth. But even if that volume would actually not be there and we cannot warehouse it on our balance sheet, as Alex said, there is a lot of distribution then what's happening that we actually create, our customers are coming and basically [indiscernible] I think credit and the expansion of credit, the investments in infrastructure, et cetera, I think that will be one big driver. We then need to make sure that we keep our cost of funds under control. That is why we continue to invest in CASA and new-to-bank acquisition, loyalty systems and auto earning. I mean, all of that will continue to be relevant. Again, I think if you look into our overall funding mix, it's very, very stable. As we said, we actually grew funding more than loans and whereas for the rest of the industry, actually LDR ratio then spiked. So again, I think, overall, a lot of the stories we had in the past will actually continue. We believe we can deal with the NIM pressure on the cost of funds by, a, really going and originate an additional fee income. But the other one is also, as we said, we would diversify in high-yielding assets and unsecured lending, et cetera. And if you see that portion and when we looked on the credit side, actually, right now, our unsecured portion stands roughly 85%, and it came down from 90%. So we have a higher proportion of unsecured in our book, while NPLs are still very much under control. So again, I think there's still room to expand the credit yields while maintaining our risk profile and the discipline on that. And then I think there's the whole fee income. We are actually very, very excited about the opportunities, of course, in the investment banking side and Xuan Minh talked about it. But also, I think everything on the life insurance, the general insurance, and we have such a high underpenetration -- such an underpenetration of these products. And as overall, the market recovers and people become wealthier, I think we also see a very, very strong increase. Already this year, we increased, for example, bancassurance 90% overall, again, [albeit] from a low level, but I think we can actually continue on that trajectory. So I think there will be not significantly new areas. Again, we switch a little bit or focus a little bit more on infrastructure, a little bit less on real estate as we continue that diversification, a little bit more on retail instead of corporate within retail, a little bit more on the unsecured side and then all the fee and base business. And again, I think that will actually help us to probably perform very well next year.

Thanks, Jens. Turning now to TCBS. Mr. Xuan Minh, could you please outline the main profit drivers for TCBS in 2026?

I mentioned in the presentation in general, the BAU core businesses that we are currently doing, we continue to see -- to be the driver and continue to see very strong growth in general for our business. In terms of bond, we also -- we are seeing more and more demand from the corporates in terms of bond issuance. We expect the number to continue to grow in terms of -- continue to be a higher record in the bond issuance in TCBS in general for corporate clients in Vietnam, where our distribution as we continue to introduce a lot of more and more wealth products on top of bond, on top of open-ended fund. We have equity structured product. We start to come into crypto product, we start to come into more other asset classes, equity-linked structured products. Then, of course, we are expecting -- continue to be -- that continues to be the key driver for us to explore because as Jens mentioned before, the penetration in Vietnam for the wealth, for the -- on the investment products in Vietnam as is still very low. Margin lending and brokerage as the market continued to see more and more activities, volume trading has been increasing tremendously since the upgrade of the market and also the upgrade of the system at HoSE. So we -- and then we're also gaining market share in general in the stock market. So we also see those as the key driver for us going forward as well.

Thanks, Mr. Xuan Minh. Next question is on liquidity for Jens. From an operating environment standpoint, does the bank anticipate any notable upward movement in deposit rates over the next 6 months? And more broadly, could you please share TCBC's funding strategy for the next 2 years?

And as we said, yes, there will be an upward pressure. And what exactly is the next 6 months in our plan? We are probably going somewhere between 50 to 60 basis points over the next year. And then we should just put that into context because sometimes forget where we all came from, during COVID, the interest rates came down very, very significantly. Even right now, these interest rate levels would be still probably below the 2018, 2019 pre-COVID situation. So it's not like something we're saying, oh, that's now an extremely high. It's just probably rather the norm, and we are gradually moving back towards that norm. So from our funding side, if you look into our book, actually, we roughly have 30% in wholesale funding, we have 70% in the customer funding. And I think we have been able to maintain that pretty much during all these cycles, even right now as LDRs were going up. And you see that our LDR actually moved pretty much sidewards and the funding mix is the same. We actually increased our liquidity buffers very, very significantly because we already moved internally to a lot of IRB ratios and Basel III ratios. So from that perspective, even in all these situations, we have maintained and improved our liquidity situation. And usually, I always say, for us, it's really more a question of exactly what are you willing to pay, in which markets are you tapping? And we're relatively flexible in that, but these are the big onboard areas. Now again, I think it all comes down to what can you achieve, right, depending on the credit quota? So if you suddenly would get a credit quota of 30%, 35%, then again, I think all these areas might actually move a little bit differently than if you're going on a 20% growth trajectory. But assuming that we are roughly in line with what we have planned, we believe that we can actually maintain that. If at any point in time, it would become -- like the loans would be getting into a level or the growth opportunities is where the funding would not be as sustainable and therefore, our loan-to-deposit ratios would be going out of control or we would actually need to do a wholesale market funding, which complete over and above what we find acceptable and/or we would need to pay for customer deposits. That's, I think, and our business model comes in very, very handily because in that case, we would probably say, well, then really try to talk to our customers and basically rather use the bond market and the capital markets and find other ways or we syndicate something out. So again, I think we are like -- and I think whoever has followed the bank for quite some time, we are very, very disciplined when it comes to our balance sheet structure, our funding structure and all of that. We are pretty much investing a lot in order to make sure that these ratios are very stable. As I said, we have not moved a lot. We actually have increased our liquidity buffers in anticipation of that. Our leverage ratios are very, very low. So we can continue on that and then we just continue on our trajectory looking for CASA operating liquidity, wealth management, et cetera. But again, we also have other ways to adjust and should suddenly be the major increase in demand. And that's why we're saying then we would be looking for other models for originate to distribute and tap other financing sources. And then the ones which we usually would use, which is customer funding or wholesale market.