VPBank sets a profit target of nearly VND 30 trillion in 2022, a “terrible” growth of more than 100%
One of the issues that shareholders are concerned about is VPBank’s 2022 profit target of nearly VND 30 trillion, equivalent to a growth of 107% compared to 2021.
Sharing with investors, CEO Nguyen Duc Vinh admitted that this is a “challenging” goal, but the bank has favorable factors to realize these “terrible” numbers.
Specifically, VPBank has two motivations to achieve its profit growth target in 2022.
One is to continue developing the traditional business segments of the parent bank and financial company with a policy of focusing mainly on the retail segment and SME customers.
The bank has proposed two credit growth scenarios for 2022, including a baseline scenario of 20%-23% and an ambitious scenario of 35% (on the basis of which the SBV accepts). However, even with just the base scenario, the Board of Management is still confident that the Bank’s profit target will not change much, as other measures can be taken such as saving costs, expanding operations. business activities, credit quality control,…
As Mr. Vinh affirmed, VPBank now has 6 business blocks and the contributions of 6 blocks all bring profits to the bank. Bank profitability does not depend solely on credit growth.
In terms of costs, in 2021 Vpbank’s cost of capital has decreased by 1.6% compared to 2020 due to the promotion of CASA, improvement of loan NIM and these will still be measures implemented by the Bank this year.
In addition, on April 28, the bank announced that it had successfully withdrawn all international syndicated loans worth USD 600 million, with a term of 3 years.
At the end of 2021, VPBank was also upgraded by the world’s leading credit rating agency, Moody’s Investors Service, from B1 to Ba3, equivalent to Moody’s national rating for Vietnam.
Thus, in less than half a year, VPBank has received 3 international syndicated loans which were arranged by Japan’s SMBC bank. Before that, at the end of 2021, VPBank successfully mobilized syndicated loans with a total value of 300 million USD twice in a row.
Thanks to the diversification of cheap input capital, Vpbank will “anchor” the cost of capital without skyrocketing when domestic savings interest rates tend to increase in 2022.
Another factor affecting profit beyond cost is operating costs. Vpbank is proving effective in saving operating costs through specific numbers shared at the conference such as the operating cost of the whole system in 2021 has decreased by more than 4%, while the parent bank, VPBank, has decreased by more than 4%. 6% compared to 2020 due to digital transformation, personnel restructuring,…
2nd growth driver is coming from the expansion of the bank’s business, from a commercial bank model to an investment bank, with an ecosystem including banks, insurance companies, and securities companies.
Regarding investment banking strategy, VPBank leaders shared that VPBank is currently serving a large number of high-end Diamond customers. If traditional products and services are aimed at serving the middle and low-income customer segments through consumer loans, home loans, etc., then for high-income customers, their needs are Investment.
Saving savings, investing in securities, buying fund certificates, or buying insurance are also a form of investment, so an insurance or securities company will be a suitable “link” in the right ecosystem. in line with VPBank’s strategic orientation in the coming years.
During the meeting, the Board of Directors approved the investment plan to buy/contribute shares of OPES Insurance Company (expected to buy from 90% to 100% of shares in the company with the purchase price not exceeding 1.5 times). book value) and agreed to contribute additional capital to its subsidiary, ASC Securities Company.
According to information from VPBank, the securities company has started contributing to the bank’s consolidated revenue in the first quarter of 2022. At the same time, the management board also set a specific profit target for the securities company this year.
About OPES insurance company, this business operates in the field of non-life insurance, in addition to the life insurance business, which is cooperating with AIA, it is expected to diversify revenue sources contributing to the contract revenue. of the bank in the near future.
“Why do we have such a big goal? Firstly, we think that the demand
The market of the economy will increase again after a difficult period, especially thanks to the
government’s strategy in supporting economic recovery with hundreds of trillions of dong being put in
market. Second, VPBank with a solid foundation and ready system will be able to
for high growth“, said Mr. Nguyen Duc Vinh – CEO of VPBank.
At the end of the first quarter, VPBank announced that PBT growth of the consolidated bank reached over VND 11,146 billion, nearly 3 times higher than the same period and achieved more than 1/3 of the profit target for the whole year. This is the record profit in a quarter that VPBank has recorded so far.
Notably, the profit growth rate from the core business of the individual bank reached more than 56%, along with the impressive recovery in business activities of FE Credit, promising to create momentum. for VPBank to make a strong breakthrough in 2022.
In the first three months of the year, credit growth at the parent bank reached 10.3%, double the industry average, with the main contribution from strategic segments. Along with that, deposit growth reached 11.5%, helping to ensure the bank’s liquidity ratios well.
Meanwhile, thanks to the promotion of digitalisation, the consolidated cost-to-income index (CIR) continued to remain at the lowest level in the market, 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 at the end of the General Meeting of Shareholders, VPBank Chairman – Mr. Ngo Chi Dung said “With the capital foundation achieved by the end of this year, it is not only sufficient to ensure high growth as planned in the next 5 years, but also the Board of Directors expects from next year will submit to the General Meeting of Shareholders a cash dividend up to 30% of the annual profit after tax.”
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