Techcombank: - Temenos

Temenos Case Study
Furthermore, the percentage of non-performing loans in 2008 was marginally down on 2006 levels, reflecting Techcombank’s
conservative lending practices, anchored in detailed assessments of credit scoring, customer payment history and the quality of
collateral.
Where T24 has helped Techcombank, in addition to helping to speed up and automate many of its risk assessment processes, is by
giving a complete view of risk. This is true both at the macro, bank level – where producing reports of total loan exposure, for example,
takes less than hour – as well as at the micro customer and counterparty level – where total individual client exposure can be seen in
real-time, while assessing risk to any one counterparty takes less than 15 minutes.
There abound cases of where Techcombank has capitalised on this global view of risk. For instance, Techcombank has been able to use
its complete view of loans and deposit arrangements to establish a better match of the time duration of the same. As an example, it
recently began to offer better time deposit rates to customers in Southern Vietnam to incentivise them to make bigger and longer
duration deposits in order to match the typically longer duration loans taken in Southern Vietnam compared to provinces in the North.
Summary
Techcombank has always been an ambitious bank with a clear understanding of the value that technology can bring in differentiating
and growing its business.
In 2001, after a detailed selection process involving local and international vendors, Techcombank selected T24 as its core
banking platform.
Since T24’s installation at the bank, Techcombank has made significant incremental investments in the system, extending the usage
of the product across more parts of the bank, while taking new releases to ensure its functionality and technology remain up-to-date.
The selection and subsequent sustained investment in T24 has facilitated Techcombank’s extraordinary growth of recent years.
The ability to launch more innovative products than peers and more quickly has enabled Techcombank to grow its deposits faster
than any other bank in Vietnam, at a CAGR of 72% over the last five years.
The ability to tailor services to individual customer requirements has translated into the highest customer satisfaction of any Joint
Stock Bank as well as strong cross-selling and repeat business: revenue per customer has increased by more than 25% on average
over the last two years.
Having a modern and scalable system has allowed Techcombank to extract significant operational efficiencies as it has grown:
IT cost/income stands at 1.5%, 84% below the industry average.
Lastly, having a robust system with a complete view of risk has allowed Techcombank to grow revenues without sacrificing risk
management. The percentage of non-performing loans in 2008 was 3% lower than in 2006 despite a 199% growth in loans over the
same period.
2008 Return on Equity:
Techcombank vs selected domestic and international peers
12
Raffeissen
BCP
Erste
POST
TCB
MHB
EXIM
Vietin
VB
ACB
SCB
0% 5.0% 10.0% 15.0% 20.0 % 25.0% 30.0% 35.0%
Source: company annual reports, Reuters, The Banker Database, broker notes