In the first quarter of 2019, FE CREDIT continued to keep a strong increase in 2018 and recorded a total of 20 percent loan and disbursement contracts compared to the same period last year.
This result is contributed by 55 percent growth in the number of loan contracts in the form of cross-selling and selling to existing customers, proving the ability to successfully exploit a huge database of over 10 million customers. FE CREDIT also achieved the increase in the number of new credit card issuance, three times higher than that of Q1, 2018 and recorded double-digit growth for net receivables and card payment.
Overall, attracting new customers, growing credit volume and improving profit margins sustain FE CREDIT’s revenue growth.
With the total disbursement of Q1 increased by more than 18 percent compared to the plan and in the same period of 2018, FE CREDIT believed that the company was ahead of the industry. Specifically, disbursements for existing customers and credit card transactions climbed impressively compared to the plan, which shows that FE CREDIT’s efforts to increase the proportion of transactions of existing customers have brought positive results.
Disbursements for current customers have increased four times compared to disbursements for new customers, although this index also increased by double digits. This development proves that this brand is the first choice of both new customers and existing customers.
With a customer-centric strategy, FE CREDIT has maintained a more stable growth for consumer electronics loans to focus on lending for motorbikes, cash and credit cards, which are the areas with higher profit margins. FE CREDIT continues to hold a significant market share in two products for motorbike loans and loans for electronics, as this is the foundation for the company to attract new customers.
This shift is reflected in the increase in net interest income, which is the result of a strategy that focuses on products with higher profit margins
FE CREDIT also invests more in the units directly serving customers such as sales, customer service, and actively replenishing human resources in key units such as digital business and process transformation to continue its journey to digital towards efficiency and cost savings.
While this trend leads to a short-term increase in operating costs, FE CREDIT believes that the cost-to-income ratio will decrease in the long term. The company has converted many processes from manual to digital and reduced avoidable costs such as card delivery fees, statements and paper forms, manual data entry, etc. by initiatives such as digital card, statement and electric contract as well as closed digital sales process.
FE CREDIT’s digital channel sales are growing strongly. This is the result of improvements in customer experience on the “$ NAP” digital loan platform, such as streamlining the process to attract more customers and deploying digital marketing campaigns in March. This campaign has resulted in far exceeding the target set thanks to the increase in the amount of interaction and natural downloads of nearly 200 percent in just one month. FE CREDIT intends to continue to exploit the response of users on digital channels to become the No. one application in Vietnam’s consumer finance.
The results show that Vietnamese users are actually very sensible to digital technology. Indeed, they are not only capable of e-commerce transactions and online payment, but also can register and choose financial solutions according to their needs. This result allows FE CREDIT to be confident that digital will be a key contributor to its sales.
FE CREDIT’s digital transformation journey continues with improved efforts by strengthening cooperation with leading Fintech companies to deliver an outstanding customer experience.
Non-performance loan ratio in Q1 was kept at 5.9 percent, equivalent to the whole of 2018, although sales often increased slowly during and after the Tet holiday. This fact demonstrates that the quality of FE CREDIT’s financial portfolio continues to improve based on the number of new loan contracts and overall portfolio quality maintained.
FE CREDIT is confident that its operating income and net profit will continue to grow similarly in previous years, while maintaining the quality of the portfolio with improved risk management standards.
