VPBank highlights SMBC deal at AGM

VPBank has expanded its customer ecosystem, which now includes over 13 million customers, an increase of four million. Investments in technology and risk management have been enhanced to support this expansion.

"In such challenging conditions, we might face difficulties in income and profitability, but we do not halt investments in our platform; instead, we prepare for a breakthrough," said Vinh.

Despite last year's economic challenges, the bank prioritised scaling up. After increasing its capital to become the second largest in the system, just behind Vietcombank, VPBank has been focused on creating opportunities for growth and ensuring efficient capital utilisation for shareholders. The rapid increase in owner's equity led to a decrease in Return on Equity, necessitating a period for recovery.

In the years 2022-2023, VPBank stood out as one of the banks with the highest credit growth in the market.

"Rapid growth carries risks, but we see it as essential to secure a scale advantage for VPBank in the years ahead," said Vinh regarding the bank's top rankings in terms of loan size, fund mobilisation, and customer base among the largest joint-stock banks.

Furthermore, VPBank has been scouting for new business opportunities and has committed to a multifaceted development strategy since 2018. This approach marks a shift from focusing solely on retail and small- and medium-sized enterprise segments to developing all banking sectors, including services for large corporations, medium enterprises, and upcoming sectors such as investment banking, asset management, and services for foreign clients.

Vinh explained the reason for this strategic shift, "Previously, our limited capital scale restricted our reach into larger segments, but now, with robust capital backing and SMBC's support, VPBank is well-equipped to pursue comprehensive development."

He also stressed the comprehensive restructuring of FE Credit, which faced challenges during the Covid-19 pandemic. As many clients struggled to meet payment obligations, FE Credit saw a rise in bad debts, prompting the bank to slow growth to ensure asset quality.

This period provided an opportunity for management to reassess and restructure the business model. With SMBC's assistance, FE Credit's portfolio has been reevaluated and there are now positive signs, including a halt in the decline of asset quality and an increase in disbursements in late 2023 and early 2024, bringing FE Credit's bad-debt ratio to below 20 per cent.

VPBank has also expanded into investment banking through its brokerage firm, VPBankS, one of the top three in terms of charter capital. Additionally, the recently acquired insurance company OPES has been integrated into the system and has already contributed over VND160 billion ($6.67 million) in profits for VPBank.

Regarding the bank's outlook on the real estate market, VPBank's chairman Ngo Chi Dung said, "Real estate remains a sector with potential, though it has recently faced several challenges. We make a clear distinction between essential residential products, such as standard apartments, and highly speculative investments, which we do not finance. I believe real estate is still an area worthy of our attention, provided that it is analysed and assessed correctly."

Vinh further commented on the potential of the real estate sector, saying, "Real estate yields significant benefits for society and the bank, though it demands strict controls and comprehensive legal documentation, particularly focusing on segments with actual demand."

Vinh elaborated on the bank’s lending practices, "Our lending to construction projects, as defined by the State Bank of Vietnam, represents 19 per cent of our portfolio, while home loans comprise about 16 per cent. Together, these account for approximately 34-35 per cent of our total lending, with the total home-loan balance amounting to roughly $3.75 billion. Although there was a slight decline last year, these loans primarily serve genuine needs, unlike those in the high-end real estate segment, which are prone to speculation."

He highlighted VPBank's position as one of the top three banks for home loans in the market, emphasising the strategic importance of this segment.

"Real estate debt management is crucial as bad debts in this area can rise rapidly. However, recovery rates are also high; we will have managed to recover nearly all the principal and 50-70 per cent of the interest when market conditions improve. The rate of capital loss in this sector is considerably lower than in others," Vinh said.

SABECO outlines growth plans for 2024 Tan Teck Chuan Lester, general director of Saigon Beer – Alcohol – Beverage Corporation, gave the result and plans of the company at its AGM on April 25 in Ho Chi Minh City.

The PAN Group sets high growth target for 2024 despite challenges The PAN Group JSC expects to achieve net revenue of VND14.7 trillion ($612.5 million) and after-tax profit of $36.75 million in 2024, an increase of 12 and 8 per cent on-year, respectively.