Vietnam Prosperity Joint Stock Commercial Bank (VPBank) continues to consolidate its position as one of the most efficient banks in terms of income, profit and profitability ratios.
By the end of 2018, total consolidated operating income were more than VND 31,000 billion, increasing by 24.2% y-o-y. The bank’s pre-tax consolidated profit reached VND 9,200 billion, representing a 13% y-o-y increase. In 2018, aiming at stabilizing the macro economy and ensuring safety of lending activities, the State Bank of Viet Nam maintained its prudent policy of credit growth limit. In this context, VPBank was approved a quota of 17 % and its subsidiary – FE Credit of 20 %, lower than its set targets, which partly affected its profit. Despite difficulties, the bank continued to affirm its role as one of the most effective credit institutions.
The bank’s operational efficiency remained at a very high level in terms of total assets and equity. By the end of 2018, total consolidated assets were VND 323,300 billion (up 16.4%), equity of VND 34,700 billion, outstanding loans reached VND 230.387 billion (up 17.1%), and capital mobilization of over VND 219,509 billion (up nearly 10%). Return on assets (ROA) and return on equity (ROE) were 2.5 per cent and 22.9 per cent, respectively. Net interest income ratio (NIM) continued to be kept at the highest level of 9 per cent in the market.
The bank’s individual profit increased by 31%
The bank’s individual profit (excluding its subsidiaries’ profit) reached approximately VND 5.100 billion, an increase of over 31 per cent compared to the previous year and accounted for more than 55% of the bank’s consolidated profit. Total operating income of the bank also achieved a high growth rate of 29% compared to 2017, reaching more than VND17.7 trillion. Its ROE increased from 20.5% to 21.2% y-o-y. ROA increased from 1.6% to 1.8% y-o-y. The sustainable profit growth of individual banks has helped VPBank to hold a high position in the group of the most profitable banks.
Great contribution from fee income
While the majority of the bank’s revenue came from lending to its strategic segment such as consumer finance, retail banking, household businesses and SMEs, income from fees also contributed significantly to the bank’s results last year as total fee income reached more than VND 3,818 billion, up 19% from previous year. The consolidated net income from fees was VND 1,612 billion, up 10% y-o-y. Meanwhile, the individual net fee income of the bank increased by 67% to VND 1,569 billion. The results were thanks to promoting insurance, credit cards and digital banking services. The increased fee income also meant that the bank’s dependence on traditional lending products has been reduced and it has diversified its services.
Strengthen risk management framework and sustainable development model
In 2018, VPBank officially submitted the application to the State Bank of Vietnam to apply TT41/SBV according to Basel 2 standards in 2019, making it one of the first banks in Vietnam to complete the preparation process. Additionally, it has been one of the banks regularly announcing financial reports under International Financial Reporting Standards (IFRS).
Invest in new growth engine
With the orientation of quality growth, digital banking strategy and new customer segments, the year of 2018 marked VPBank’s great achievements. It launched an innovative digital bank for the young generation named “YOLO” and $NAP of FE Credit. YOLO is expected to create the first digital banking ecosystem in Viet Nam while $NAP brings an automatic lending process. Together with other digitalization services, YOLO and $NAP are expected to provide new growth momentum for VPBank in the future.
In retail banking segment, the launching of VPBank Diamond for priority customers is one of the key investment activities of the bank in the past year. VPBank Diamond is expected to introduce new services such as assets management and consultancy to middle and upper classes, which are growing rapidly in Vietnam.
With the current business performance and future investment activities, VPBank has consolidated a solid foundation and carefully prepared for new growth drivers in the future.