Services
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With its robust capital foundation, resilient growth strategy, and market sensitivity, Tien Phong Bank (TPBank, HOSE: TPB) finished the first quarter with positive results across all business areas. Notably, the first-quarter profit surged three times that of the previous quarter, creating promising momentum towards the VND 7,500 billion profit target set at the recent 2024 Annual General Meeting of Shareholders.
Improved profitability, robust growth in securities investment
According to its first-quarter 2024 financial report, TPBank’s individual pre-tax profit reached over VND 1,800 billion, representing an approximate 4% increase year-on-year and a threefold growth compared to the fourth quarter of 2023. The return on equity (ROE) ratio remained at a relatively high 17.5%.
TPBank’s total mobilization in the first quarter rose 4% year-on-year to nearly VND 315,200 billion.
Pursuing the strategy of focusing on individuals, business households, and shop owners with high average income, the number of customers grew steadily from 12 million in 2023. This solid foundation fortified TPBank’s high-quality CASA. As of March 31st, TPBank’s CASA ratio reached 23.3%, continuing its increase from the previous quarter.
In 2024, the bank’s revenue structure has undergone a shift, gradually reducing its reliance on credit. Thanks to its adept understanding of the market, the securities investment segment brought significant profit, with income surging more than 12-fold year-on-year and contributing 10% to total net income.
TPBank’s first-quarter net interest income exceeded VND 3,400 billion, an approximate 25.2% increase year-on-year, accounting for the majority of the bank’s VND 4,700 billion in total individual operating income for the quarter. Accordingly, TPBank’s total operating income jumped 28% compared to the same period in 2023.
Along with the robust growth in net interest income, service income also witnessed a positive increase, reaching VND 715 billion, approximately 3% higher year-on-year, attributed to the bank’s service diversification and expansion.
At the 2024 Sao Khue Award Ceremony, TPBank was the sole representative to be honored in three consecutive categories: the Digital Banking Application Award in the “Digital Banking” field; the award for Online Bid Bond on the TPBank Biz platform in the “Innovation” sector; and the award for Bio Center – a centralized citizen database and biometric authentication system in the “Solutions for Promoting Digital Access” field.
These prestigious awards continue to affirm TPBank’s leading position in digital banking with innovative financial products based on artificial intelligence (AI), big data, and biometric technology. Digital transformation has enhanced TPBank’s operational efficiency and optimized expenses, making it one of the banks with the most cost-effective operations. TPBank’s CIR (cost-to-income ratio) in the first quarter decreased by 8% compared to the same period last year, to around 35%.
In the first quarter of 2024, TPBank’s Tier 1 capital adequacy ratio (CAR) increased by 9% year-on-year to VND 210,990 billion. According to TPBank’s representative, in addition to focusing on personal loans, TPBank prioritizes sectors aligned with the State Bank of Vietnam’s sustainable development policies, such as renewable energy, waste treatment and pollution prevention, sustainable water management, and social housing.
The bank also emphasizes implementing various financial inclusion policies to improve customers’ accessibility to finance, particularly for small and medium-sized enterprises (SMEs) and businesses owned or led by women (WSMEs).
According to experts from KB Securities Vietnam (KBSV), TPBank’s credit growth is expected to accelerate alongside the recovery in consumer demand and the real estate market. The bank’s NIM will improve due to the continuous decline in funding costs.
KBSV also noted that TPBank’s efforts to strengthen bad debt management in 2023 alleviate provisioning pressure in 2024. With a comprehensive risk management system, TPBank’s capital adequacy ratio (CAR) under Basel III standards stands at 12% (as of March 31st), significantly exceeding the Basel III minimum requirement of 10.5%.
This forms the basis for TPBank to issue a 25% dividend (5% in cash), as the bank’s CAR will comfortably meet regulatory requirements even after dividend distribution, maintaining its position in the top group.
As part of its strategic vision to become a robust and sustainable financial group, in this first quarter, TPBank invested in Viet Cat Fund Management JSC (VFC). The acquisition of the subsidiary took place in two stages. In the first stage, TPBank acquired 75% of VFC‘s shares through a private placement. In the second stage, TPBank purchased the shares of VFC‘s existing shareholders, raising its total shareholding in the subsidiary to 99.9%.
