- 2024-01-19T00:00:00
- Company Research
LPB released its 2023 results with TOI of VND15.6tn (USD646mn; +10.3% YoY) and bottom-line net profit of VND5.6tn (USD230mn; +23.5% YoY), fulfilling 121% and 141% of our respective FY2023 forecasts. LPB’s Q4 2023 NPAT was VND2.6tn (+165% QoQ; +294% YoY). The bank’s results beat our expectations, which we attribute partly to (1) higher-than-expected fee income that could have been driven by a higher-than-expected upfront banca fee, (2) higher-than-expected NIM, and (3) lower-than-expected NPL formation. We see a slight upside to our earnings forecasts for LPB, pending a more extensive review.
2023 loan growth was 17.0% YoY, and Q4 2023 loan growth was 4.5% QoQ. We note that LPB did not have a corporate bond balance as of Q4 2023.
2023 customer deposit growth was 10.0% YoY vs our full-year forecast of 11.0% YoY. In Q4 2023, LPB’s CASA ratio improved better than our anticipation to 9.7% (+3.4 ppts QoQ and +0.9 ppts YoY).
2023 NIM was 3.24% (-73 bps YoY), which was slightly ahead of our expectation of 3.15%. Q4 2023 NIM increased 63 bps QoQ thanks to a 20-bp QoQ increase in IEA yield and a 36-bp QoQ decrease in COF.
2023 NOII was VND4.4tn (+94.8% YoY), completing 202% of our full year forecast — including our assumption for an upfront bancassurance fee. Strong NOII growth was mainly driven by (1) a 115% YoY increase in pure NFI, (2) 42x YoY increase in gains from FX trading from a low base, and (3) a 72.6% YoY increase in net other income.
2023 CIR decreased 0.6 ppts YoY to 36.9% due to a 10.3% YoY increase in TOI that outweighed an 8.5% YoY increase in OPEX.
Asset quality improved QoQ with the NPL ratio grossed up write-off rate decreasing by 37 bps to 2.88% in Q4 2023 vs our forecast of 3.30%. We note that the balance of NPLs to grossed up write-offs decreased 7.3% QoQ in Q4 2023.
2023 credit cost was 0.56% (vs 0.55% in 2022). In addition, LPB’s LLR was 93.8% (+26 ppts QoQ; -48 ppts YoY).
LPB’s consolidated 2023 results
VND bn | 2022 | 2023 | YoY | Q4 2022 | Q4 2023 | YoY |
NII | 11,900 | 11,203 | -5.9% | 2,772 | 3,346 | 20.7% |
Non-interest income | 2,270 | 4,422 | 94.8% | 909 | 3,145 | 246.0% |
OPEX | (5,307) | (5,760) | 8.5% | (1,507) | (1,595) | 5.8% |
PPOP | 8,863 | 9,865 | 11.3% | 2,174 | 4,896 | 125.2% |
Provision expenses | (3,174) | (2,826) | -11.0% | (1,306) | (1,544) | 18.1% |
NPAT-MI | 4,510 | 5,572 | 23.5% | 668 | 2,628 | 293.5% |
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Loan growth** | 12.7% | 17.0% | 4.3 ppts | 3.3% | 4.5% | 1.2 ppts |
Deposit growth** | 19.8% | 10.0% | -9.8 ppts | 11.6% | 3.9% | -7.7 ppts |
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NIM | 3.97% | 3.24% | -73 bps | 3.55% | 3.70% | 15 bps |
Interest-earning asset yield | 8.40% | 9.33% | 93 bps | 8.59% | 9.64% | 105 bps |
Cost of funds | 4.81% | 6.76% | 195 bps | 5.52% | 6.50% | 98 bps |
CASA ratio* | 8.8% | 9.7% | 0.9 ppts | 8.8% | 9.7% | 0.9 ppts |
CASA ratio plus term deposits in FX | 10.1% | 9.8% | -0.3 ppts | 10.1% | 9.8% | -0.3 ppts |
CIR | 37.5% | 36.9% | -0.6 ppts | 40.9% | 24.6% | -16.3 ppts |
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NPLs / Gross loans | 1.46% | 1.34% | -12 bps | 1.46% | 1.34% | -12 bps |
Group 2 loans / Gross loans | 1.51% | 1.13% | -38 bps | 1.51% | 1.13% | -38 bps |
Accrued interest / IEAs | 1.30% | 1.35% | 5 bps | 1.30% | 1.35% | 5 bps |
Source: LPB, Vietcap — *CASA volume includes demand deposits and margin deposits; ** Q4 2022 and Q4 2023 loan and deposit growth is QoQ growth; 2022 and 2023 loan and deposit growth is YoY growth.
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