Ambitious Growth and Sustainable Development Targets for 2024 and Beyond
On April 17th, 2024, LPBank convened its 2024 Annual General Meeting of Shareholders (AGM) and approved all proposals. The bank unanimously adopted a business plan targeting a 50% increase in its pre-tax profit for 2024, reaching 10,500 billion dong.
To achieve this goal, CEO Ho Nam Tien announced that the bank will focus on four core tasks:
Prioritize credit growth in priority sectors and develop the retail market in suburban and rural areas.
Exercise strict risk management to ensure high credit quality, maintaining the NPL ratio below 0.9%.
Focus on increasing non-term deposits (CASA) to reduce the cost of capital, enabling loan interest rate reductions while maintaining the bank’s NIM.
Increase the proportion of non-credit income from foreign exchange and services.
The bank’s CIR (cost-to-income ratio) improved significantly in 2023. In 2024, the bank aims to maintain the same level as 2023, below 38%.
AGM 2024 set a target of 10,500 billion dong in profit.
LPBank’s service revenue increased by 115% in 2023 compared to 2022. In 2024, CEO Ho Nam Tien revealed that the bank will focus on activities such as:
Bundling multiple products and services for easier customer selection, especially targeting SME export-import companies and corporate clients using international remittance services. LPBank is well-positioned to expand into these segments thanks to its significant investments in technology, which helps customers reduce operating costs, manage risks effectively based on data and customer behavior.
Implementing a 360-degree customer evaluation software system to better understand and meet customer needs. “We aim to increase the number of cross-selling services per customer to a minimum of 5 services per customer.”
Digital Transformation as a Catalyst for Growth
CEO Ho Nam Tien at LPBank AGM 2024
In 2023, LPBank implemented approximately 40 digital technology projects, including new technologies such as eKYC identification, contactless payment (NFC), Datalake/Data Warehouse data management platform, payment (payments) solutions, Treasury (front-to-back) solutions, and Lienviet24h (Omni channel) multi-channel banking platform.
This year, LPBank will focus on process digitization using robots, enhanced data mining with artificial intelligence and advanced analytics, to maximize customer benefits and reduce manual tasks for bank staff.
LPBank will also intensify its investment in developing digital banking, modernizing its IT systems to support management and provision of modern banking products and services, and evolving towards a new digital banking model.
Assessing the differentiating factor in LPBank’s digital transformation compared to other banks, CEO Ho Nam Tien said: “LPBank places the customer at the center of digital transformation, using enhanced convenience and user experience as measures of its success.” Currently, LPBank has made impressive progress in its digital transformation journey, leveraging the power of data to drive business value.
Determination in Dealing with Bad Debt
Vice Chairman of the Board of Directors, Bui Thai Ha, speaking at LPBank AGM 2024
In the past year, LPBank effectively managed bad debt with a ratio of 1.34%. Responding to a shareholder’s question about the target bad debt ratio, Vice Chairman of the Board of Directors Bui Thai Ha stated that a figure of 0.9% is entirely achievable owing to the bank’s resolute approach to bad debt management. Discussing the bank’s bad debt strategy, Mr. Ha said the bank is implementing a combination of measures:
Adopting a centralized bad debt management model.
Regularly reviewing and updating the system of institutional documents.
Adjusting human resource policies to increase attraction, recruitment, and retention of high-quality, specialized personnel.
Consistently supporting customers, assisting them in overcoming difficulties to stabilize their production and business operations, while resolutely dealing with customers who intentionally delay or default on their debts.
Vertical Business Model Plays a Significant Role
In 2023, LPBank transitioned to a vertical business model to create a foundation and platform for significant growth in the future. This is a global management trend adopted by most modern banks, enabling them to manage more effectively, enhance operational quality, and optimize costs and revenue.
Discussing the model, the CEO of LPBank said that this operating model helps maximize the advantage of LPBank’s extensive network to provide specialized services tailored to different types of corporate clients and individuals, thereby increasing business efficiency. In practice, the vertical business model proved effective in the first quarter of 2024, with the bank earning pre-tax profits of 2,886 billion dong, an 84.36% increase year-over-year.
This transformation not only set the stage but also laid the foundation for LPBank to pursue its strategy of becoming a leading retail bank in Vietnam.
Leveraging Network Advantage
LPBank’s extensive network spanning 63 provinces and cities has been a distinctive advantage for many years. This year, the bank plans to leverage its network to strengthen its retail business. Vice Chairman of the Board of Directors Bui Thai Ha shared: “Most commercial banks do not invest in establishing new branches in rural and remote areas. In contrast, through our partnership with VNPost, LPBank is able to focus on expanding our network of branches in rural and remote areas by converting post offices in district towns and provincial cities into bank branches, while upgrading the infrastructure and facilities of our head office, branches, and transaction offices across the network.
