- 2024-10-18T00:00:00
- Company Research
LPB released its 9M 2024 results with TOI of VND14.4tn (USD714mn; +57.4% YoY) and PBT of VND8.8tn (USD351mn; +139.2% YoY), fulfilling 80% and 88% of our respective FY2024 forecasts. This implies Q3 2024 PBT of VND2.9tn (-4.4% QoQ; +133.7% YoY). Overall, LPB’s 9M 2024 earnings tracked ahead of our expectations. We see potential upside to our current forecasts, pending a more extensive review.
9M 2024 credit growth was 16.1% (vs H1 credit growth of 15.2%), far surpassing the system-wide credit growth of 9.0%. Credit growth was mainly driven by the corporate segment, with growth of 23.8% in 9M 2024, accounting for 62% of the total loan book. The retail segment witnessed slight growth of 5.4%. We note that LPB did not have a corporate bond balance as of Q3 2024.
9M 2024 customer deposit growth was 14.3% vs our full-year forecast of 13.0% YoY. In Q3 2024, LPB’s CASA ratio decreased 2.0 ppts QoQ but improved 1.8 ppts YoY to 8.1%.
9M 2024 NIM increased 42 bps YoY to 3.55% vs our full-year forecast of 3.46%, mainly due to a stronger decrease in CoF. Q3 2024 NIM was 3.44% (-5 bps QoQ), which we attribute mostly to a 7 bps QoQ decrease in IEA yield amid strong competition in lending among banks. We note that in 9M 2024, accrued interests reached VND7.8tn (+28.8% QoQ; +55.5% vs Q4 2023). This trend warrants close monitoring in coming quarters.
9M 2024 NOII was VND3.5tn (+173.5% YoY), completing 88% of our full-year forecast. We attribute the strong growth in NOII mainly to net other fee income, which soared to VND 2.3tn (+24.6x YoY). We attribute the strong growth in other fee income partly to the implementation of a credit arrangement fee, which the bank had not charged in previous years.
9M 2024 CIR decreased 16.7 ppts YoY to 28.9% vs our full-year forecast of 35.7%, given a 57.5% YoY increase in TOI while OPEX remained flat YoY.
Asset quality deteriorated QoQ with the NPL ratio increasing by 23 bps to 1.96% in Q2 2024 vs our full-year forecast of 1.30%. The group 2 loan ratio remained relatively flat QoQ at 1.16%.
The annualized 9M 2024 credit cost was 0.79% (vs 2.24% in 2023). 9M 2024 provision expenses increased 9.2% YoY, completing 94% of our full-year forecast, and tracked ahead of our expectation. In addition, LPB’s LLR was 77.5% in Q2 2024 vs 93.6% and 77.1% in 2023 and Q2 2024, respectively.
LPB’s consolidated 9M 2024 results
VND bn | 9M 2023 | 9M 2024 | YoY | Q3 2023 | Q3 2024 | YoY |
NII | 7,857 | 10,887 | 38.6% | 2,633 | 3,778 | 43.5% |
Non-interest income | 1,277 | 3,493 | 173.5% | 481 | 1,291 | 168.1% |
OPEX | (4,165) | (4,161) | -0.1% | (1,341) | (1,538) | 14.7% |
PPOP | 4,969 | 10,219 | 105.7% | 1,773 | 3,531 | 99.1% |
Provision expenses | (1,282) | (1,401) | 9.2% | (533) | (632) | 18.6% |
NPAT-MI | 2,944 | 7,051 | 139.5% | 993 | 2,331 | 134.8% |
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Loan growth** | 11.9% | 16.1% | 4.2 ppts | 4.0% | 0.7% | -3.3 ppts |
Deposit growth** | 5.8% | 14.3% | 8.5 ppts | 1.9% | -5.8% | -7.7 ppts |
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NIM | 3.13% | 3.55% | 42 bps | 3.07% | 3.44% | 36 bps |
Interest-earning asset yield | 9.41% | 8.03% | -138 bps | 9.44% | 7.69% | -175 bps |
Cost of funds | 6.85% | 4.97% | -187 bps | 6.86% | 4.70% | -216 bps |
CASA ratio* | 6.3% | 8.1% | 1.8 ppts | 6.3% | 8.1% | 1.8 ppts |
CASA ratio plus term deposits in FX | 6.4% | 8.2% | 1.8 ppts | 6.4% | 8.2% | 1.8 ppts |
CIR | 45.6% | 28.9% | -16.7 ppts | 43.1% | 30.3% | -12.7 ppts |
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NPLs / Gross loans | 2.79% | 1.96% | -83 bps | 2.79% | 1.96% | -83 bps |
Group 2 loans / Gross loans | 1.24% | 1.16% | -8 bps | 1.24% | 1.16% | -8 bps |
Accrued interest / IEAs | 1.62% | 1.76% | 13 bps | 1.62% | 1.76% | 13 bps |
Source: LPB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q3 2023 and Q3 2024 loan and deposit growth is QoQ growth; 9M 2023 and 9M 2024 loan and deposit growth is 9M growth.
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