VPBank makes over VND13 trillion of profit in 2020 with 71pct contribution of the parent bank

23-Jan-2021 Intellasia | Doanh nghiep va Tiep thi | 6:02 AM Print This Post

Vietnam Prosperity Commercial Joint Stock Bank (VPBank, VPB) has announced its business results in 2020. Accordingly, the bank continued to succeed in realising its goals of sustainable and efficient growth in 2020. Its profit exceeded the plan, asset quality continued to be improved, the task of restructuring debts and supporting customers hit by the Covid-19 epidemic achieved good results.

Specifically, as of late 2020, the total assets of VPBank were more than 419 trillion dong, up by 11.1 percent over the end of 2019. The total outstanding loans to customers of the consolidated bank reached more than 320 trillion dong, up by 19%, in which the separate bank recorded an increase of 21.8%. The consolidated total capital mobilisation and issuance of valuable papers was more than 296 trillion dong, up by 9.1 percent compared to 2019. The Lending to Deposits Ratio (LDR) of the separate bank was balanced at 73.1%, much lower than the limit of 85 percent set by the SBV.

Grasping the liquidity opportunities of the market in 2020, VPBank flexibly regulated the balance sheet and capital restructure, fulfilling the strategic target of reducing cost of capital (COF) set at the beginning of the year. In December 2020 alone, VPBank’s COF declined by up to 1.5 percent over the same period of last year. The ratio of Current Account Savings Account (CASA) of the parent bank was maintained at 15 percent in the whole year 2020, while it was 13 percent at the end of 2019.

With the target of diversifying capital sources, VPBank signed an agreement with International Finance Corporation (IFC) for a loan of 100 million US dollars to enhance liquidity and optimise capital sources. The Asian Infrastructure Investment Bank (AIIB) also sponsored an additional 100 million-dollar package to support VPBank to expand trade finance and finance working capital for Vietnamese businesses, including small and medium enterprises (SMEs), overcoming the Covid-19 crisis.

VPBank’s consolidated Total Operating Income (TOI) reached more than 39 trillion dong, up by 7.4%, in which the parent bank alone accounted for nearly 21 trillion dong, up by 18.6%. The non-interest income (including income from services and foreign exchange and securities trading) continued to be the driving force for the parent bank’s revenue growth of 27 percent in 2020. The proportion of non-interest income on TOI accordingly rose from 19 percent in 2019 to 21%.

The digitalisation strategy of VPBank continued to be effective with a double increase in the e-banking transaction revenue compared to 2019. The maximum control of costs combined with the digital application helped VPBank’s consolidated operating decline by 7.7 percent compared to 2019. The bank’s consolidated Cost to Income Ratio (CIR) plummeted to 29.2 percent compared to the 33.9 percent in late 2019.

As a result, VPBank’s consolidated pre-tax profit in 2020 was more than 13 trillion dong, completing 127 percent of the plan set at the beginning of the year, up by 26.1 percent compared to 2019. In particular, the profit of the separate bank contributed 71 percent to the consolidated profit. At the separate bank, the Return on Equity ratio (ROE) and Return on Assets ratio (ROA) respectively reached 24.6 percent and 2.2%.

Regarding risk management, VPBank continued to confirm its efficiency. The bad debts were well controlled with a consolidated rate of 2.9%, of which the separate bank for the first time recorded bad debt ratio of less than two percent.

Along with the efforts to curb bad debts, VPBank continued to actively strengthen resources. The consolidated provision expenses for the whole year 2020 increased by 15.2 percent compared to 2019 (excluding the provision expenses for Vietnam Asset Management Company (VAMC) in 2019). At the separate bank, the increase of provision expenses reached 27%.

VPBank’s safety ratios were maintained at good level, in which the ratio of short-term funds used for medium and long-term loans was controlled at 28.4%, much lower than the maximum specified level of 40%. The Capital Adequacy Ratio (CAR) of the consolidated bank was more than 11 percent according to Basel II standards, higher than the minimum level of eight percent.

In addition, implementing the Circular 01 of the SBV in order to remove difficulties for customers hit by the Covid-19 epidemic, VPBank has lowered interest rates for nearly 110,000 customers with a total outstanding credit of nearly 52 trillion dong, in which the interest rate decrease was from 0.05 percent to 4.7%.

 

Category: Finance, Vietnam

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