Topic for presentation: A bank analysis report Ms Nguyen Thi Thuy Dung Topic for presentation: A bank analysis report Write a report to analyze a commercial bank’s performance and risk: Introduction about the bank: history, business strategy, leadership,… Perform the financial analysis (via ratios) to evaluate its performance and risks over the past years 3a How was the bank affected by the Covid 19 pandemic in 2019? How did the bank deal with these impacts? (3b How has the bank adopted recent technological innovation in banking/ finance? ) => Choose either 3a or 3b Provide the overall assessment from the viewpoint of a depositor of the bank and a regulator (SBV) Use real DATA to support your analysis; Use Excel tools (graphs, pivot tables, dashboard) to present your data Guide for your analysis Structure of financial statements (source of data) Framework of financial analysis (analysis of data) Example of report (presentation of data analysis) Structure of financial statements Where to find these financial data? Sources of raw data include: Company websites (investors category), find for “annual report” or “financial statements” Analysis of company’s stocks (for listed banks) Companies/platforms provide financial data i.e fpts, cafef, finngroup Structure of financial statements Key structure of Balance Sheet Balance sheet as at 31/12/2019 Cash and cash equivalents Balances with SBV Current accounts, deposits and placements with banks Investments in securities Loans to customers Provision for credit losses Capital contribution, long-term investments Net fixed assets Other assets Total assets Amounts due to Government and SBV Deposits and borowings from other instituitions Customers deposits Valuable papers issued Funds for finance, entrusted investment Other liabilities Total Liabilities Minority Interest Chartered capital Other capital Retained earnings and reserves Total Shareholders’ Equity 2009 13,778 34,684 249,470 169,429 734,707 2,464 6,710 21,892 1,222,719 Bảng cân đối kế toán Tiền tương đương tiền Tiền gửi NHNN Tiền gửi cho vay TCTD khác Chứng khốn đầu tư Cho vay khách hàng Dự phịng rủi ro cho vay KH Góp vốn, đầu tư dài hạn Tài sản cố định ròng Tài sản khác Tổng tài sản 92,366 73,617 928,451 21,384 20 25,998 1,141,836 Các khoản nợ CP NHNN Tiền gửi vay TCTD khác Tiền gửi khách hàng Phát hành giấy tờ có giá Vốn tài trợ, ủy thác đầu tư cho vay Các khoản nợ khác Tổng nợ phải trả (10417) 83 37,089 5,470 38,241 80,883 Lợi ích cổ đơng thiểu số Vốn điều lệ Các nguồn vốn khác Lợi nhuận giữ lại quỹ Tổng vốn chủ sở hữu Structure of financial statements Key structure of Income Statement Income statement of 2019 Interest income Interest income Net interest income Service fee income Service charges Net fee income net gain from Foreign exchange gain, net 67,724 -33,147 34,577 9,003 -4,696 4,307 3,378 Net gain on trading and investment securities Income fr capital contribution and equity investment Other non-interest income Non-interest income Operating income Operating expenses 153 245 3,070 11,153 45,730 -15,818 Operating profit (pre-provision) Provisions (net of reversals) Profit before taxes Income tax expense Minority interest Net profit /loss 29,913 -6,790 23,122 -4,596 -15 18,511 Báo cáo KQ hoạt động kinh doanh Thu nhập lãi Chi phí lãi Thu nhập lãi Thu nhập từ hoạt động dịch vụ Chi phí cho hoạt động dịch vụ Lãi từ hoạt động dịch vụ Lãi từ hoạt động KD ngoại hối Lãi từ CK kinh doanh CK đầu tư Lãi từ góp vốn mua cổ phần Lãi từ hoạt động khác Tổng thu nhập lãi Tổng thu nhập hoạt động Chi phí hoạt động LN từ hoạt động kinh doanh (trước DPRR TD) Chi phí DPRR LN trước thuế Chi phí thues TN doanh nghiệp Lợi ích cổ đơng thiểu số Lợi nhuận ròng Framework of financial analysis ➢ The popular framework used in by analysts in Vietnam Credit growth (tăng trưởng tín dụng) Deposit growth (tăng trưởng vốn tiền gửi) Liquidity (tính khoản): loans to deposit ratio (tỷ lệ cho vay tiền gửi) Capital Adequacy : CAR (capital adequacy ratio) (an toàn vốn) Asset quality (chất lượng tài sản): Non- Performing- Loáns ratio (tỷ lệ nợ xấu) Profitability (khả sinh lời): ROAA (Return on Average Assets), ROAE (Return on Average Equity), NIM (Net Interest Margin) Operational efficiency (hiệu hoạt động): Cost to income ratio (chi phí hoạt động thu nhập hoạt động) ➢ Another framework: CAMELS (Capital adequacy, Asset quality, Management, Earnings, Liquidity, Sensitivity) Framework of financial analysis ➢ The popular framework used by analysts in Vietnam (FORMULA) • Credit growth= (total loans 2019- total loans 2018)/ total loan 2018 • Deposit growth = (deposits 2019-deposit 2018)/ deposits 2018 • Liquidity: loans to deposit ratio = total loans/ total deposits • Capital Adequacy: CAR = (Tier 1+ Tier capital)/ Risk-weighted Assets • Asset quality: NPLs ratio = NPL/ gross loans,… • Profitability: ROA = Net income/ Total assets, ROE= net income/equity, NIM= (Interest Income- Interest Expense)/ Earning assets • Operational efficiency: Cost to income ratio = Operating Expenses/ Operating Income You can calculate by yourself from data provided in financial statements OR => You can find these figures in reports (ratios already computed by analysts) Framework of financial analysis ➢Another framework: CAMELS Capital adequacy (an toàn vốn) Asset quality (chất lượng tài sản) Management (chất lượng quản lý) Earnings (profitability, khả sinh lời) Liquidity ( tính khoản) Sensitivity (tính nhạy cảm với biến động môi trường kinh doanh TTCK) Example of reports Vietcombank Investor Relation presentation https://portal.vietcombank.com.vn/content/enus/Investors/Investors/Investor%20Presentations/Presentations/2020/ 20200421_1Q2020_VCB%20IR%20Presentation.pdf VCB Stock analysis report by Yuanta company https://yuanta.com.vn/wp-content/uploads/2020/03/VCB_CompanyUpdate_03.27.2020.pdf