Friday , June 2 2023

Techcombank chairman says property loans given only for legally sound projects

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.

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