VPBank on stable development track

VPBank eyes a 9.9 per cent jump in total deposit volume in the first nine months of this year

These encouraging results were noted in the bank’s third-quarter financial statement which has just been released.

Particularly, the bank posted a 14.7 per cent jump in consolidated credit expansion in the first nine months compared to the end of 2018, which is much higher compared to the banking sector’s average growth of 8.4 per cent during the period.

VPBank also posted a 19.9 per cent jump in total deposit volume.

Its consolidated total operating income during the period reached VND26.333 trillion ($1.14 billion), a 19.1 per cent jump compared to a year ago. If the abrupt earnings from bancassurance co-operative contracts were excluded, the jump in total operating incomes would be 23.9 per cent on-year.

The total operating income of the bank inched up 25 per cent against the same period last year and up 7.1 per cent compared to the previous quarter.

The bank’s consolidated pretax profit stayed on its growth momentum, touching VND7.199 trillion ($313 million) by the end of September, a 17.5 per cent jump on-year. Excluding the abrupt earnings from bancassurance co-operative contracts, VPBank’s operating income jumped 36.6 per cent on-year.

Net interest income continued to be the key driver of the bank’s total operating income, hitting VND22.428 trillion ($975.13 million) during this nine-month period, up 23 per cent on-year. The income from services operation, however, rose impressively by 93.4 per cent on-year to VND1.942 trillion ($84.43 million) in the first nine months of this year, attesting to the bank’s proper orientation to diversify income sources and lessen reliance on net income sources.

Improving asset quality

By the end of September, VPBank’s non-performing loans stood at 3.1 per cent compared to 4.24 per cent one year ago. Particularly, the bad debts ratio of the parent bank fell to 2.45 per cent by the end of the third quarter. During this period, this ratio of FE Credit –VPBank’s consumer lending arm – went down to 5.21 per cent by the end of September from 6.36 per cent a year ago.

VPBank was also doing a smart job in tackling bad debts placed at state-owned Vietnam Asset Management Company (VAMC) which was dubbed the bad debts bank, bringing its bad debts at VAMC from more than VND3.1 trillion ($134.78 million) to less than VND908 billion ($39.4 million), down 70 per cent during the period.

Low bad debts rate and strong measures to bring down bad debts at VAMC helped the bank improve its asset quality remarkably, paving the way for VPBank to post stable profit growth in the time ahead.

Upbeat performance

VPBank’s consolidated operating expenditure in the first nine months of this year rose by 17.3 per cent on-year, lower than the bank’s 19.1 per cent revenue jump. This contributed to bringing down the bank’s cost-income ratio (CIR or efficiency ratio) to 34.7 per cent compared to the 35.8 per cent in the first half.

Improved expenditure ratios came in the wake of adjustments to the bank’s business and operating model which took place in the latter part of 2018.

Particularly, the parent bank has taken drastic measures to optimise operating expenditure, which grew by only 11.6 per cent on-year. The parent bank’s operating expenditure in the third quarter even shed 4.3 per cent compared to the second quarter. Its CIR also fell to 38.8 per cent by the end of September, compared to the 41.3 per cent at the end of June.

Higher profits attest to the bank’s operating efficiency. Along with this, the bank’s return on assets (ROA) bolstered 2.3 per cent by the end of September 2019 compared to the 2.1 per cent in the first half of this year.

Returns-on-equity (ROE) reached 20.4 per cent by the end of September, compared to 19 per cent in the year’s first half. The capital adequacy ratio, according to Basel II standards, rose 11.4 per cent by the end of September, staying at a high level compared to the central bank’s requirements.

Improved operation efficiency and asset value will provide solid fundaments for VPBank to continue on this growth momentum in the last quarter as well as in the upcoming years.