VPBank reports US$248 million in profit for first 9 months of 2017

By Minh An - Oct 19, 2017 | 07:43 AM GMT+7

TheLEADERThe price of Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) shares is dramatically increasing up to VND41,300 (US$1,8) each on trading session of Oct 18, a move geared up by its highly attainable business performance.

VPBank reports US$248 million in profit for first 9 months of 2017
In 2017, VPBank set a pre-tax profit target of VND7,200 billion (nearly US$317 million).

Vietnam Prosperity Joint Stock Commercial Bank has announced its third-quarter business results with an impressive growth in profit, total assets, equity and capital adequacy ratio.

VPBank claims it is likely to reach its VND7,200 billion (US$317 million) profit target by the end of the year.

In the first three quarter, the bank’s consolidated profit before tax was VND5,635 billion (US$248 million) increasing by 79 per cent year on year and meeting 78% of the full-year plan.

These impressive profits have been mainly generated from total operating income, which increased by 48 per cent compared with the same period last year and have reached VND17,574 billion (US$773 million).

Net interest and similar income in the first nine months was VND14,944 billion (US$660 million), up 41 per cent year on year. Fee income was another highlight, increasing 84 per cent to VND1,035 billion (US$45.5 million). Income from risk-weightedloans reached VND735 billion, up 62 per cent year on year.

Meanwhile, operating expenses grew at a rate of only 33% year on year, much lower than the growth rate of total operating income. The cost to income ratio also fell from 39% at the end of 2016 to 36% at the end of September 2017. The non-performing loan ratio of the bank remained at 2.6%.

“These indicators show that VPBank’s strategy, which focuses on the retail banking, household, and SME segments, continues to be highly efficient. The impressive results stem from effective market expansion, improved productivity, reduced costs, and risk controls that are in accordance with international standards,” a VPBank representative shared.

Another highlight of the first nine months of the year was VPBank’s total assets reaching VND253,847 billion (over US$11 billion), up 11% from the beginning of the year. Credit balances – including customer lending and corporate bonds – rose by 14 per cent to VND181,232 billion (roughly US$7.97 billion).

With the successful private placement of 160 million shares at a price of VND39,000 (US$1,72) per share – four times the face value – owners’ equity grew to VND27,624 billion (roughly US$1.2 billion), an increase of more than VND6,400 billion (roughly US$281 million), equivalent to 61 per cent from the beginning of the year.

Total deposits, including customer deposits and valuable papers issued in the third quarter reached VND192,065 billion (roughly US$8.44 billion), up 11 per cent from the end of 2016.

To improve the balance sheet and diversify deposit sources, VPBank has signed a finance package with two international credit institutions including International Finance Corporation (IFC) and Credit Suisse Singapore. VPBank has received US$122 million from IFC and US$41 million from Credit Suisse, raising the total amount from credit institutions to over VND6,600 billion (roughly US$290 million).