Private lender VPBank targets 114% profit growth in 2024

Vietnam’s leading private lender VPBank targets to rake in VND23.17 trillion ($914.18 million) in pre-tax profit this year, a year-on-year increase of 114%, according to its 2024 business plan approved by shareholders at the AGM on Monday.

The bank also targets VND974.27 trillion ($38.44 billion) in total assets and VND598.86 trillion ($23.63 billion) in customer deposits, up 19% and 22% respectively.

Its credit growth is expected to hit 25%, equivalent to outstanding debt of VND752.1 trillion ($29.67 billion), while the bad debt ratio is set below 3%.

Regarding the 2023 profit distribution, after setting up funds, VPBank's remaining profit will be VND8.35 trillion ($329.45 million), VND7.93 trillion of which will be used to pay cash dividends at a rate of 10%. The dividend payment will be done in the second and third quarters of 2024.

The meeting also approved a plan to issue 30 million shares at maximum under the Employment Stock Ownership Plan (ESOP), with a price of VND10,000 ($0.39) per share.

A number of important contents were also okayed at the event, including the acquisition of a credit institution with total assets and equity not exceeding 5% of the respective size of VPBank by the end of 2023 and charter capital not surpassing VND5 trillion ($197.28 million), at the request of the State Bank of Vietnam.

After the acquisition, the transferred credit institution must operate in the form of a single-member limited liability bank with VPBank being the owner and an independent legal entity.

The meeting also green-lighted the issuance of sustainable international bonds via private placement to a number of investors. Specifically, the bank plans to issue a maximum of $400 million worth of five-year bonds in 2024 and the first quarter of 2025.

The shareholders also okayed the loan and deposit framework contract with financial firm VPB SMBC FC (or FE Credit) - a subsidiary of the bank, with limits of up to 35% of the charter capital recorded in VPBank's latest financial statement.

VPBank will establish a branch or subsidiary bank or representative office abroad once it sees business opportunities.

Regarding FE Credit's operations and future directions, VPBank CEO Nguyen Duc Vinh said that currently 49% of FE Credit’s charter capital is owned by SMBC and the remaining 51% by VPBank.

As Vietnam's consumer finance market is very potential, Vinh was confident that FE Credit will earn VND1.2 trillion ($47.35 million) in after-tax profit this year. Consumer finance remains a business segment with great potential so the firm’s profit can return to the milestone of VND3-4 trillion ($157.82 million).