Tien Phong Commercial Joint Stock Bank (TPBank, code on HCM City Stock Exchange (HoSE): TPB)) is step by step affirming its stable and transparent health situation with its steadily growing profit. In the first eight months of 2019, TPBank’s profit was almost equal to the profit in the whole 2018. Notably, all bad debts at Vietnam Asset Management Company (VAMC) of TPBank were settled.
Good profit growth higher revenue from services
In the last three years, the profit of TPBank has nearly doubled year after year. Particularly, in 2018 the year that TPB shares were listed, TPBank reported a pre-tax profit of 2.258 trillion dong. This is also the record high profit that TPBank achieved since its establishment.
In the first half of 2019, TPBank posted 58 percent growth in pre-tax profit compared to the same period of 2018, reaching 1.620 trillion dong, completing 51 percent of the set plan.
The bank’s sharp profit increase is thanks to the positive developments of most business segments. Specifically, its service revenue rose up by 98 percent, and net profit from the trading of investment securities increased by 156 percent over the same period of last year.
In 2018, the revenue from services of TPBank was among the highest growth rates in the system. Particularly, the net profit from services of TPBank rose by fourfold compared to the same period of 2017, reaching more than 676 billion dong.
TPBank is having a strong growth in credit and profit. Along with Military Commercial Joint Stock Bank (MBB), Asia Commercial Joint Stock Bank (ACB), Vietnam Technological and Commercial Joint Stock Bank (Techcombank, TCB), Vietnam Prosperity Commercial Joint Stock Bank (VPB), TPBank is one of the five banks approved for a four percent credit growth limit expansion, raising the credit growth room from 12-13 percent to 16-17 percent.
In 2018, banks continuously accelerated their equity increase to ensure the capital adequacy ratio (CAR) under Circular 41/2016/TT-NHNN and TPBank was in similar situation in its first year of listing. Nevertheless, the bank’s after-tax profit growth was faster the equity increase, in which the Return on Equity (ROE) was still maintained at high level, soaring to 20.87 percent. It shows that the bank has been using its resource efficiently.
TPBank’s business activities have been growing stably, seen through the gradual increase of ROE over the years. This is one of the goals that both managers and investors of TPBank are interested in because high profits will help the bank preserve capital, increase market share and attract investors.
The Net Interest Margin (NIM) of TPBank has also risen in recent years. Particularly, after being listed in 2018, TPBank made it to the top banks with the highest NIM.
In fact, the NIM increase is not due to the increase in lending interest rates, because competitiveness must be ensured. It is because TPBank has optimised its credit portfolio to get the best interest income, in the context when the credit growth is not too prosperous despite being adjusted further after the bank earlier complied with Basel II standards.
According to the latest updated data of TPBank, in the first eight months of 2019, its Return on Assets (ROA) was 1.22 percent, Return on Equity (ROE) was 15.45 percent and NIM was 2.87 percent. With this growth momentum, the expected ROE of TPBank in 2019 is 23.18 percent, ROA is 1.83 percent and NIM is 4.31 percent.
In the report on the industry’s prospects in the last six months of 2019 dated August 27th 2019, Viet Dragon Securities Company (VDSC) stated that although TPBank’s room to expand NIM becomes more limited due to the pressure of mobilising medium and long-term capital, the bank is among banks with positive forecast on NIM growth.
TPBank’s service income still has the potential to grow, especially income from payment services as the bank has invested in digital banking. In addition, TPBank is also expected to see income growth from commission fees.
In 2019. TPBank aims to achieve 3.2 trillion dong of pre-tax profit and 158 trillion dong of total assets, and increase charter capital to 10 trillion dong. It also targets mobilisation fund of 142 trillion dong and outstanding loans of 101 trillion dong. The bad debt ratio is expected to be controlled below two percent.
By the end of June 30th 2019, TPBank’s total assets reached more than 145.716 trillion dong, up by seven percent compared to the same period of last year. The bank’s outstanding loans were 88.957 trillion dong, up by 15 percent compared to the beginning of the year. Its bad debt ratio was controlled at 1.47 percent, lower than the industry’s average.
TPBank said that in the first eight months of 2019, it has completed nearly 70 percent of the pre-tax profit plan with more than 2.159 trillion dong, nearly equivalent to the profit achieved in 2018. The bank’s after-tax profit in the same period was more than 1.727 trillion dong.
Continuing to follow retail banking, particularly targeting individual customers and small and medium enterprises, TPBank’s credit continued to grow stably with outstanding credit reaching 90.850 trillion dong as of late August, completing nearly 90 percent of the year plan.
The bank’s mobilisation fund recorded 95.082 trillion dong of customer deposits and issuance of valuable papers, completing 67 percent of the year plan. The bad debt ratio was still kept below two percent.
Notably, TPBank has repurchased all the special bonds of VAMC ahead of schedule with a total value of 756.5 billion dong, and provisioned for risks of all these bad debt items.
It is known that TPBank will focus on developing new digital banking projects with application of solutions and experiences from the world, expand its network with special attention on digital models such as LiveBank, eBank, Savy, QuickPay, etc. The bank plans to open new 100 LiveBank points, raising the total number of these models to 200 points nationwide.
