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Annual General Meeting for 2024 of VPBank held on the morning of 04/29 in Hanoi. Photo: The Manh
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​According to the proxy statement, as of 9am on 04/29, the Annual General Meeting for 2024 of VPBank was attended by 180 shareholders, representing over 6.52 billion shares, equivalent to 81.93% of the total number of shares entitled to vote. The meeting met the requirements to proceed.
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5 Main Growth Orientations for 2024
Mr. Nguyen Duc Vinh – Member of the Board of Directors and General Director of VPBank said that the 2022-2026 growth targets remain unchanged. If in previous years there were delays, in the coming years, especially the period of 2024-2025, it will be the time for the Board of Directors to focus on overcoming challenges and regaining growth. VPBank will focus on 5 main growth orientations for 2024.
First, focus on quality growth. If in previous 5-year periods, VPBank focused on expanding scale, now it must be done in parallel. Customers that bring in value will bring more profit.
In the coming time, VPBank will pay great attention to asset quality. This year, though the impacts from 2023 have not subsided and the difficulties in the real estate market have not yet eased, VPBank still sees opportunities from government support to the market, supply and demand have potential to recover. However, up to now, the bank is still very cautious as the average growth in Q1/2024 is still not high. The Board of Directors of VPBank still believes that the second half of 2024 will be the time when demand in the market gradually recovers. The recovery could be stronger in 2025, but we remain optimistic in preparing for that growth.
Secondly, synchronize all customer segments, and target key growth in strategic segments such as individual customers and SMEs at 25-30%. At the same time, look for development opportunities in the FDI segment, which is assessed to have great potential. It is expected to more than double the number of customers and more than quadruple the scale of mobilization and lending, so that the FDI segment can become one of the future pillars of VPBank, in harmony with other segments, creating great opportunities in the market.
Previously, due to limited capital scale, we were not able to access many large segments, but now with a large capital foundation and the support of SMBC, we believe VPBank has enough strength and resources to develop synchronously.
Thirdly, VPBank has determined the trend from the government and the world towards green credit (ESG) in the direction of sustainable development. We will aim to support the shift to clean energy, support the fight against climate change, protect the environment, and support the community of disadvantaged people in society. Therefore, VPBank is not just a bank that serves the rich and high-income earners to minimize risks. Although that remains a focus, we also have a high sense of social responsibility.
VPBank is providing services to the lowest classes, or to small and medium enterprises, especially micro-enterprises that do not have access. This is the responsibility and social commitment of the Bank, contributing to both economic development, business growth, as well as making a contribution to society.
Fourthly, VPBank builds and strengthens its technology and digitization platform, especially in the development of a database. First, creating a data research promotion unit, the Board of Directors has directly participated in the development of an initiative to support the promotion of applications of these initiatives. We do not stop at slogans but have a commitment to bringing the results of applying technology, data, and AI into practice to support the modernization and digitization of the bank in order to bring practical value to the community.
Fifthly, the ecosystem is defined not only by the scale of the Group but also by the links between the segments, in which VPBank focuses on the ecosystem supporting investors, consumers, and real estate transactions. The pilot programs and key initiatives have received significant investment from the Board of Directors.
With the above 5 orientations, with VPBank optimizing conditions, the target is to create a growth of about 30% in total assets, and the target is to maintain high growth in mobilization at 25-30%, and lending to maintain the highest level in the market.
VPBank is also carrying out a comprehensive restructuring of FE Credit. After 10 years of bringing great value to the bank, FE Credit entered a difficult period due to COVID-19. More than 60% of customers were affected, many workers lost their ability to pay, leading to a high increase in the bad debt ratio. Therefore, VPBank has implemented many measures to reduce the growth rate and ensure asset quality. This is also an opportunity for the board of directors to review the business model and carry out the restructuring.
SMBC also supported FE Credit in reassessing the model and restructuring the portfolio. Currently, FE Credit’s portfolio remains the largest in the consumer credit market but requires a change in quality. There have been positive signs in stopping the decline and increasing disbursement growth in Q4/2023, Q1/2024. The decline in asset quality has also been halted, bringing FE Credit’s bad debt ratio down to below 20%.
In Quarter 1/2024, FE Credit still faced difficulties and did not bring about any efficiency. In the second quarter, VPBank saw more positive signs, especially in the last 6 months of the year. FE Credit is expected to bring about efficiency as expected.
On the other hand, VPBank has also developed the investment banking segment through the VPBankS securities company. This is one of the top 3 securities companies with the largest charter capital. OPES insurance company, although newly acquired in late 2022, has, after being integrated into the system, also brought over 160 billion VND in profit to VPBank.
Cash dividend payment of 10%, issuance of 30 million ESOP shares
Regarding the 2023 profit distribution plan, VPBank‘s profit remaining after mandatory fund withdrawals is nearly 8,353 billion VND. The bank plans to spend about 7,934 billion VND to pay cash dividends to shareholders at a rate of 10% (shareholders receive 1,000 VND for every share owned).
The implementation time is expected in Q2-3/2024. The specific time will be decided by the Board of Directors to ensure compliance with legal regulations and the actual conditions of the Bank. After the dividend payment, VPBank‘s remaining profit is nearly 419 billion VND.
This will be the second consecutive year that VPBank has paid dividends in cash. Previously, Mr. Ngo Chi Dung – Chairman of the Board of Directors of VPBank announced at the 2023 Annual General Meeting that the bank is committed to paying cash dividends to shareholders for the next 5 consecutive years.
In addition, the Board of Directors of VPBank will submit to the AGM the plan to issue a maximum of 30 million shares under the employee stock option program (ESOP). The expected offering price is VND 10,000 per share. The eligible participants are the officers and employees of VPBank and its subsidiaries according to the criteria and list decided by the Board of Directors. Non-executive members of the Board of Directors are not allowed to purchase.
Pre-tax profit target growth by 114%
In 2024, VPBank sets a target of 23,165 billion VND in consolidated pre-tax profit, an increase of 114% compared to
