LienVietPostBank will close the exclusive insurance partner in mid-June

At the 2022 annual general meeting of shareholders on the afternoon of April 28, shareholders asked many questions to the bank’s leaders, revolving around the intention to cooperate in selling exclusive insurance and the reason why VNPost had failed to divest many times.

Vice President of LienVietPostBank (LienVietPostBank) Pham Doan Son said that the bank is about to expire a 5-year contract to sell exclusive insurance for Dai-ichi Life and is actively negotiating with large insurance companies.

The sale of insurance to Dai-ichi Life in the past five years, according to Mr. Son, is a “rehearsal” period for the bank to enter the next 15-20 years of exclusive long-term cooperation. The bank has negotiated through many rounds with businesses and is expected to “close” the exclusive insurance sale in mid-June.

“If successful, LienVietPostBank’s business results will have a big change in 2022 when it records an additional prepaid fee,” he said.

In 2022, the bank aims to increase pre-tax profit by more than 30% to VND4,800 billion, but according to the bank’s vice president, this is a modest plan. Particularly in the first quarter of the year, the bank completed 37% of the year plan with pre-tax profit of 1,795 billion dong.

Bank leaders said that the current profit target also does not include the prepaid fee that will be collected from the exclusive insurance distribution contract.

Responding to shareholders’ questions about the impact of Covid-19 on asset quality, Mr. Son said that by the end of 2021, the outstanding balance of loans for restructuring because of Covid-19 is 2,500 billion VND and is expected to decrease this year. .

With this restructured debt balance, while many banks choose to set aside 100% in advance, LienVietPostBank set aside according to the schedule – 30% in the previous year and is expected to deduct an additional 30% this year.

Mr. Son also explained that the phenomenon of bank credit balance going sideways in the first quarter of the year was caused by a sharp decrease of more than 13 trillion in outstanding loans for some projects while each month, the bank increased by about 4,000 billion VND in retail loans. He added that the proportion of outstanding loans for real estate at banks is from 8 to 10%.

At the meeting, Mr. Son also responded to shareholders’ questions when LPB in the group of stocks fell the most in recent times: “Banks do not intervene and inflate stock prices”. According to him, stock price is the story of the market, and he is not only focused on how best for the bank’s operations.

Although the banking industry is under pressure to reduce profit margin in 2022 due to increasing deposit rates while lending rates do not decrease, bank leaders are still confident that bank profit margins will increase slightly from 3.5% last year. to 3.6% by 2022. According to the leader of LienVietPostBank, with a lending portfolio focusing on retail in the agricultural and rural market, lending interest rates for this group are not under pressure to decrease significantly this year.

Regarding the divestment of the Vietnam Post Corporation (VNPost), Mr. Son said that this business divested because it complied with the request of the State Bank not to invest outside the industry. VNPost auctioned LPB shares at the right time when the market went down while the State’s policy was not to divest capital below the initial valuation. Therefore, this business has not yet divested capital.

VNPost’s divestment will not affect the bank’s operations or network because the two sides have a 50-year cooperation contract. LienVietPostBank remains loyal to its retail lending plan in the rural market, Mr. Son said.

In 2022, the bank plans to increase its capital by more than VND 6,200 billion, through three options including paying a 15% dividend from undistributed profit after tax in 2021; offered 95.8 million shares (5.54% ratio) to foreign investors and offered 300 million shares (16.4% ratio) to existing shareholders. After completion, the bank’s charter capital is expected to increase by nearly 42%, reaching nearly 21,250 billion VND.

The bank plans to offer shares to foreign investors, however, one shareholder is also skeptical about the feasibility of this option. The sale of shares to foreign investors has been mentioned by the bank in the last 3 years but has not yet produced results. Mr. Son said the bank had worked with many investors, but when the price was closed, the market went down. Therefore, the sale of capital must wait for a more favorable market time.

Quynh Trang