Vietnam private lender LPBank reports $394 mln profit in 10 months

Hanoi-based Loc Phat Vietnam Joint Stock Commercial Bank, or LPBank, logged an after-tax profit of VND10 trillion ($394 million) in the first 10 months of this year, said its leadership at the EGM on Saturday.

The bank leaders also expressed confidence that it would surpass the year's profit target of VND10.5 trillion set by the AGM earlier in the year.

During the EGM, LPBank, listed on the Ho Chi Minh Stock Exchange as LPB, had all of its proposals approved by shareholders.

The bank proposed to relocate its headquarters from LPB Tower at 210 Tran Quang Khai street, Hanoi to a new location better suited to its short-, medium-, and long-term development strategy.

While the new location was not specified, the decision aligns with LPBank's goal to expand its presence in both rural areas and small to medium-sized urban centers, reinforcing its vision of becoming the most trusted financial partner of individuals, households, and small businesses in these regions.

It planned to raise its charter capital to VND29.87 trillion ($1.18 billion) through a share dividend at a rate of 16.8%, replacing the earlier plan approved at the AGM to increase capital by offering up to 800 million shares to existing shareholders.

LPBank also moved forward with another plan to elect two additional members to its board of directors for the 2023-2028 term, raising the total board members to nine.

The new board members, Vuong Thi Huyen, 50, and Pham Phu Khoi, 61, boast extensive experience in the finance and banking sectors.

Huyen previously served as deputy CEO of Vietnam International Bank (VIB), while Khoi is currently chairman and independent board member at LPBank Securities (LPBS).

The most noteworthy was LPBank's proposal to acquire a 5% stake in tech giant FPT Corporation. According to the leadership, this move will diversify LPBank’s investment channels and optimize shareholders’ capital contributions.

With FPT's current market capitalization, LPBank would need to purchase approximately 73 million shares to reach a 5% stake. Based on the closing price of FPT shares on Friday, this acquisition could cost LPBank more than VND9.8 trillion ($386 million).

Responding to shareholders’ queries, LPBank’s executives said the bank has focused on streamlining its operations to improve efficiency, which has led to a notable increase in profitability.

It has made significant strides in digital transformation, investing in IT infrastructure to ensure faster transaction processing. Its focus on optimizing the cost-to-income ratio (CIR) has begun to show results, with the bank aiming for a CIR below 30% in the near future.

The leadership said ESG (environmental, social, and governance) has become a key focus for LPBank. It has enlisted top global consultants to guide its ESG transformation, which started in early 2024.

As of October 2024, LPBank's total assets had reached VND460 trillion ($18.12 billion), with a credit growth of 18%, nearing its temporary credit room.

LPBank is also committed to maintaining a minimum capital adequacy ratio (CAR) of 8%. Its current CAR stands at over 13%, which is above the regulatory requirement.

In terms of dividends, LPBank aims to maintain a dividend payout ratio of at least 16.8% annually, with a target of up to 20%. The lender now does not have any plans to sell shares to foreign shareholders.

On the HoSE, LPB shares closed Friday at VND31,450 ($1.24) apiece.