Services
According to the recently released Q2 2024 financial report, TPBank’s estimated standalone pre-tax profit reached VND 3,733 billion, a 10.3% increase compared to the same period last year. All business segments witnessed promising growth, resulting in a relatively high return on equity (ROE) of 17.5%.
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Credit growth shows a promising recovery
With the economy showing signs of recovery, the bank’s credit growth regained momentum in Q2. Specifically, TPBank’s market 1 and TPDN credit outstanding reached more than VND 226,600 billion, a 16% increase compared to the previous year. With a strong focus on retail lending, the bank continued to extend credit to priority sectors as defined by the government and the State Bank of Vietnam, including projects in the fields of transportation, agriculture, commercial infrastructure, cultural and social infrastructure, and essential and fast-moving consumer goods production.
TPBank pays special attention to small and medium-sized enterprises owned by women, as well as clients in the information technology and telecommunications sectors, and offers various green credit programs. The green credit segment has been growing steadily, accounting for nearly 3% of the total credit outstanding, with projects in renewable energy, water management, energy efficiency improvement, and greenhouse gas emission reduction.
According to the latest report by MBS Securities Joint Stock Company, given TPBank’s impressive credit growth history over the years, its credit growth is expected to reach 16% for the full year 2024 and 18% in 2025.
CASA ratio continues to improve, NIM maintained despite lower lending rates
As of June 30, 2024, TPBank’s total capital mobilization increased by nearly 5% year-on-year to nearly VND 317,700 billion. The bank’s CASA ratio, a measure of low-cost current and savings accounts, improved to over 22% as of June 30, 2024. According to a report by KBSV Securities Joint Stock Company, TPBank’s CASA ratio ranked 5th in the industry, thanks to its digital transformation strategy that attracts younger customers. This advantageous CASA ratio also helps keep the bank’s funding costs low.
For Q2, the bank’s standalone operating income surpassed VND 8,900 billion, a nearly 18% increase compared to 2023. Net interest income remained the largest contributor, accounting for nearly 75% of the total, reaching over VND 6,660 billion, a 21.9% increase year-on-year.
The net interest margin (NIM) was maintained despite lower average lending rates, as the bank reduced its funding costs through an optimized funding structure and an improved CASA ratio. KBSV had forecasted that TPB’s NIM would remain at approximately 4% in Q2, Q3, and Q4 of 2024, considering it a positive NIM and a supportive factor for TPBank’s net interest income.
In addition to the growth in net interest income, non-interest income also showed a promising increase, reaching nearly VND 1,700 billion, thanks to the diversification of services and the expansion of the bank’s operations. TPBank’s treasury business demonstrated its agility in the market, with income from this segment increasing by nearly 60% year-on-year at the end of Q2.
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On the stock market, TPB has attracted positive recommendations from analysts. In their June report, KBSV set a target price for TPB shares of VND 22,700 for 2024, representing a 24.4% upside potential as of June 20, 2024, and recommended a “BUY” rating for the stock.
Efficient operations through digitization and robust risk management
TPBank’s proactive digitization efforts to enhance operational efficiency and optimize operating costs have positioned it as a leader in cost-efficient operations. The bank’s cost-to-income ratio (CIR) for Q2 continued to decrease to approximately 34%, a 12% improvement compared to the same period last year.
With its comprehensive and industry-leading risk management system, TPBank’s capital adequacy ratio (CAR) under Basel III remained strong at 12% as of June 30, well above the minimum requirement of 10.5%. The bank has been proactive in risk management and bad debt coverage, avoiding potential negative impacts by increasing loan loss provisions over the past year. Maintaining its excellent risk management foundation, TPBank retained its position as the “Strongest Bank in Vietnam” for the second consecutive year in The Asian Banker’s “Asia Pacific Strongest Banks by Balance Sheet” list.
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