NCB sees major growth from core products and niche markets

Bank turns around performance following restructuring in 2012.

From standing at the edge of the abyss, the National Citizen Bank (NCB) has recorded among the highest revenue of commercial banks in Vietnam. This success comes from the determination of its leaders to shift development towards niche markets and also design tailor-made products for each customer segment.

Throughout the recent years, NCB’s net profit has consistently grown at an average of 30 per cent a year. Total assets in 2016 rose 43.1 per cent against 2015 to VND69 trillion ($3.03 billion) and net profit by 90.9 per cent to VND210 billion ($9.2 million), or five times higher than the period prior to its restructuring in 2012.

As at the end of 2016, mobilized capital stood at VND42.76 trillion ($1.9 billion), up 24.9 per cent compared with 2015, while customer deposits were up 24 per cent to VND25.4 trillion ($1.12 billion). Significantly, the bank’s bad debt rate was kept below the 3 per cent threshold, standing at 2.07 per cent of total outstanding credit as at December 31, or three times lower than in the period before restructuring, while loans in Groups 3, 4 and 5 were tightly controlled. 

Instead of becoming involved in a race with giant banks, after restructuring it chose its own path by providing specific tailor-made products for customers in each segment. “Trying to win customers from major banks in the retail and wholesale markets would be like hitting our heads against a brick wall,” one NCB Director said. “Major corporate customers have been with banks like Vietcombank and BIDV for a long time, while the individual customer segment has seen fierce competition between large commercial banks and 100 per cent foreign-owned banks.”

Immediately upon restructuring, the bank decided its core customer segment would be most suitable and developed products that would become the specialty of its individual loan segment. In the time to come, “we will continue to design tailor-made products with ‘state-of-the-art’ technology for each and every individual customer, so that NCB will become the most friendly and efficient financial consultant,” the Director added.

The bank’s niche products, such as home loans, car loans, and household business loans saw the highest revenue compared to other products and services in 2016, with total customer loans last year rising two-fold from 2015 to VND26 trillion ($1.14 billion).

From a small bank with only some saving products, after more than 22 years of development and three years of restructuring, 2016 marked a turning point for NCB with the launch of significant new products such as the NCB app for smartphones, NCB Visa Credit Card, and the NCB Priority Customer Center, among others. It now has 2,400 employees and 90 transaction points in major cities and provinces in Vietnam.

During the 2016-2020 period, NCB plans to focus its business in the north while improving customer awareness in the south and in the central region. At the same time, it will transform each transaction point to become a revenue center. After 2018, it will expand its network to the north-west, south-central, and central highlands markets.

It was recently named among the Top 5 leading banks in Bac Ninh, Bac Giang, Thue Thien Hue and other large provinces. Not only gaining success in its business, NCB is also the best bank in Vietnam regarding corporate social responsibility (CSR) activities.

In 2012, it established the NG Community Fund, operating as a non-profit, voluntary organization, raising funds from NCB’s employees and partners. NCB has efficiently used the community fund to create social and welfare bridges, schools for remote children, charity houses for poor people, and sponsorships to people affected by natural disasters and by war.

by Quang Huy