According to documents of the 2019 Annual general Meeting (AGM) on April 23rd of Tien Phong Commercial Joint Stock Bank (TPBank), the bank proposed shareholders to approve the plan to seek and acquire a finance company. This is the first time TPBank mentioned this issue.
The bank expects to acquire 100 percent stake of the finance company’s shareholders to make the company a subsidiary operating in consumer finance.
Explaining about this plan, the bank said that the establishment of a finance company through the acquisition of an existing finance company is a good opportunity for TPBank’s development according to the set objectives.
Answering shareholders, TPBank’s Chair of the Board of directors (BOD) Do Minh Phu refused to disclose the name of the targeted finance company but said that the deal is in negotiation process. TPBank may carry out the deal right in 2019, after the competent authorities allow it.
Many experts said that consumer finance has developed very quickly over the years, but it is still modest compared to the market potential. From 2018 until now, the market has continuously welcomed new participants. Not only TPBank, many other banks such as Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Asia Commercial Joint Stock Bank (ACB), Orient Commercial Joint Stock Bank (OCB), etc. also want to join the market.
Closing the first quarter of the year, TPBank recorded a pre-tax profit of 853 billion dong, equivalent to more than 26.6 percent of the annual plan. Other indicators such as total assets, total capital mobilisation and outstanding loans have completed more than 88 percent of the annual plan with respectively 140 trillion dong, 125.319 trillion dong and 93.6 trillion dong.
Thus, the total outstanding loans of TPBank increased by 11.2 percent, very close to the ceiling limit of the State Bank of Vietnam (SBV) while TPBank aims to reach an annual growth of 20 percent. TPBank’s general director Nguyen Hung answered shareholders that the bank has not yet been approved for credit limit expansion, but he believed that the bank will be approved by the operator.
Hung explained that since TPBank is one of the banks that have soon completed Circular 41 of the SBV stipulating the capital adequacy ratio (CAR), it will be prioritised in expanding credit limit. Hung added that the 20 percent credit growth is within reach, but a higher rate needs approval of the SBV.
At the AGM, TPBank also proposed shareholders to approve the establishment of Asset Management Company with a charter capital of 50 billion dong. Previously, in 2011, TPBank also proposed but did not receive approval of the SBV as its operation remained small in scale and it was in the restructuring phase.
Last year, TPBank’s pre-tax profit was nearly 2.260 trillion dong, up by more than one trillion dong compared to 2017. Other indicators such as total assets, total mobilisation and outstanding credit reached more than 136.1 trillion dong, 118.5 trillion dong and 84.3 trillion dong. The bank’s bad debt ratio was 1.1 percent.
In 2018, TPBank’s undistributed profit was recorded at more than 1.5 trillion dong, but TPBank did not pay dividends and retained profit for expanding business this year.
In 2019, TPBank expects to increase pre-tax profit by 41 percent compared to 2018, reaching 3.2 trillion dong; total assets by more than 10 trillion dong, reaching 158 trillion dong. The bank aims to recorded mobilisation growth of more than 20 percent (reaching 142.3 trillion dong) and credit growth of 20 percent (reaching 101 trillion dong). The bank sets to control bad debt ratio below 1.5 percent.
