VPBank sets profit target of nearly VND30 trillion in 2022, a ‘terrible’ growth of more than 100%

One of the issues worrying shareholders is VPBank’s 2022 profit target of nearly VND30 trillion, which represents a 107% growth from 2021.

VPBank sets a profit target of nearly VND 30 trillion in 2022, a huge growth of more than 100% - Photo 1.

Speaking to investors, CEO Nguyen Duc Vinh admitted that this is a “challenging” target but the bank has favorable factors to realize these “terrible” numbers.

VPBank has two main reasons for reaching its earnings growth target in 2022.

A is to further develop the traditional business areas of the parent bank and finance company, focusing primarily on the retail segment and SME customers.

The bank has proposed two credit growth scenarios for 2022, including a baseline scenario of 20% to 23% and an ambitious scenario of 35% (on the basis of which the SBV accepts). But even in the basic scenario, the Management Board is confident that the bank’s earnings target will not change much, since other measures such as cost savings and business expansion can be taken. Business activities, credit quality control,…

As confirmed by Mr. Vinh, VPBank now has 6 business blocks and the contributions of 6 blocks bring all the profits to the bank. Bank profitability does not only depend on credit growth.

VPBank sets a profit target of nearly VND 30 trillion in 2022, a huge growth of more than 100% - Photo 2.

In terms of costs, Vpbank’s cost of capital has decreased by 1.6% in 2021 compared to 2020, driven by the promotion of CASA and the improvement in credit NIM, and the bank will do so later this year actions to be taken.

In addition, on April 28, the bank announced that it had successfully retired all of its $600 million 3-year international syndicated loans.

At the end of 2021, VPBank was also upgraded from B1 to Ba3 by the world’s leading rating agency Moody’s Investors Service, which corresponds to Moody’s national rating for Vietnam.

Thus, in less than half a year, VPBank received 3 international syndicated loans arranged by the Japanese SMBC Bank. Before that, in late 2021, VPBank successfully mobilized two consecutive syndicated loans totaling $300 million.

Thanks to the diversification of cheap working capital, Vpbank will “anchor” the cost of capital without skyrocketing when domestic savings rates tend to rise in 2022.

Another factor affecting profit beyond cost is operating expenses. Vpbank is proving to be effective in saving operational costs through specific figures shared at the conference such as: B. The operating costs of the entire system fell by more than 4% in 2021, while the parent bank, VPBank, fell by more than 4%. 6% compared to 2020 due to digital transformation, staff restructuring,…

2. Growth drivers results from the expansion of the bank’s business from a commercial banking model to an investment bank with an ecosystem of banks, insurance companies and securities firms.

Regarding the investment banking strategy, VPBank executives said that VPBank currently serves a large number of high-end Diamond clients. If traditional products and services aim to serve the middle and low-income customer segments through consumer credit, home loans, etc., then the needs of high-income customers are investments.

Saving, investing in stocks, buying fund certificates or buying insurance are also forms of investing, so an insurance or securities company is a suitable “link” in the right ecosystem. in accordance with the strategic orientation of VPBank in the coming years.

VPBank sets a profit target of nearly VND 30 trillion in 2022, a huge growth of more than 100% - Photo 3.

During the meeting, the Board approved the investment plan to purchase/contribute OPES Insurance Company stock (expected to purchase 90% to 100% of the Company’s stock at a maximum purchase price of 1.5x). book value) and agreed to contribute additional capital to its subsidiary ASC Securities Company.

According to VPBank, the securities house will already contribute to the bank’s consolidated earnings in the first quarter of 2022. At the same time, the Management Board has also set a specific profit target for the securities firm for this year.

Through the OPES insurance company, this business operates in the non-life insurance space, in addition to the life insurance business partnering with AIA, it is expected to diversify the revenue streams that contribute to contract revenue. the bank in the near future.

Why do we have such a big goal? First, we think that demand

The economic market will pick up again after a difficult period, mainly thanks to the

Government strategy to support economic recovery with hundreds of trillion dongs

Market. Secondly, with a solid foundation and a finished system, VPBank will be able to do this

for high growthsaid Mr. Nguyen Duc Vinh – CEO of VPBank.

At the end of the first quarter, VPBank announced that the consolidated bank’s PBT growth has reached over VND11,146 billion, nearly three times the same period, and achieved more than 1/3 of the full-year profit target. This is the record quarterly profit that VPBank has posted to date.

Notably, the earnings growth rate from each bank’s core business reached more than 56%, along with the impressive recovery in FE Credit’s operations that promised to provide momentum. for the strong breakthrough of VPBank in 2022.

In the first three months of the year, the parent bank’s loan growth reached 10.3%, twice the industry average, with the main contribution coming from strategic segments. At the same time, deposit growth reached 11.5%, which helped to ensure the bank’s liquidity metrics well.

Meanwhile, the consolidated cost-to-income (CIR) index continued to remain at the market’s lowest levels thanks to the advancement in digitization, showing the effective use of every dollar of capital to generate profits at the bank. this item.

The good news for Vpbank shareholders is that VPBank Chairman Mr. Ngo Chi Dung said at the end of the General Assembly: “With the capital base achieved by the end of this year, this is not only sufficient to ensure high growth as planned over the next 5 years, but is also what the Management Board expects propose a cash dividend of up to 30% of annual profit after tax to the Annual General Meeting from next year.”


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