Private Vietnamese lender TPBank targets to earn VND7.5 trillion ($294.75 million) in after-tax profit this year, according to CEO Nguyen Hung.
“This is a feasible goal as the figure in the first quarter surpassed VND2.5 trillion ($98.25 million), or 33.33% of the year target,” Hung said at the bank's 2024 AGM held in Hanoi on Tuesday.
At the AGM, shareholders approved plans to pay cash and share dividends to increase the bank’s charter capital in 2024. Accordingly, shareholders will receive cash dividends at a rate of 5% (VND500 or $0.02 for one share) from undistributed profit after donating to funds as of December 31, 2023.
The bank will issue a maximum of 440.3 million shares to pay dividends to shareholders at a rate of 20%. After issuance, TPBank's charter capital will increase by more than VND4.4 trillion to VND26.42 trillion ($1.04 billion).
Responding to shareholders’ questions about outstanding loans and risks from real estate developers Novaland and Hung Thinh Land, TPBank chairman Do Minh Phu said that the outstanding debt of these customers was not too big.
CEO Nguyen Hung added that Novaland's outstanding debts include one bond package and a loan for a project with a high chance of debt recovery. The remainder is mainly personal loans to buy homes, totaling VND3 trillion ($117.9 million).
Meanwhile, Hung Thinh Land’s outstanding debts have been cleared, most of which were bought back by its partners, he said.
One of the notable issues raised at the AGM was the loan that TPBank disbursed to the Vinahud Urban and Housing Development Investment JSC to carry out an "internal" M&A deal with R&H Group JSC.
According to a resolution of the AGM dated April 12, 2023, Vinahud shareholders approved a proposal to purchase an 83% stake in Friends Investment and Construction Co., Ltd. for VND987.5 billion ($38.8 million) and 100% of the capital in Me Linh Thinh Vuong Co., Ltd. for VND950 billion ($37.33 million), making VND1,937.5 billion ($76.13 million) in total.
Of which, 80% or VND1,710 billion ($67.2 million), would be arranged by TPBank, 2.9 times the total assets and 4.2 times the equity of Vinahud at the beginning of 2023.
As of December 31, 2023, Vinahud had borrowed nearly VND2 trillion ($78.6 million) from TPBank. This is Vinahud’s largest loan, accounting for nearly half of the company's total capital.
Vinahud’s self-assessment for the fourth quarter of 2023 showed that the firm suffered a loss of more than VND200.3 billion ($7.87 million) last year, compared to a profit of nearly VND21.3 billion ($837,020) in the same period the previous year. Therefore, the company's undistributed after-tax loss as of December 31, 2023 amounted to more than VND170.2 billion ($6.69 million).
Regarding this issue, the TPBank CEO said the bank's principles are to ensure compliance with legal regulations and minimize risks.
“There is no debt rollover here because this activity is not allowed according to regulations. We meet banking rules and lending conditions as well as comply with legal regulations. Credit risk is an important issue for banks, so TPBank does not take risks. The projects that we give loans have good collateral and full legality, and promise to be effective in the future," he affirmed.