- 2024-07-30T00:00:00
- Company Research
TPB released its results for H1 2024 with TOI of VND8.9tn (USD356mn; +17.5% YoY) and PBT of VND3.7n (USD149mn; +10.3% YoY), achieving 54.8% and 51.4% of our full-year forecasts, respectively. H1 2024 bottom-line results were broadly in line with our projections due to the improvement in NIM and the well-controlled operating expenses outweighing the surge in provision expenses. On a QoQ basis, Q2 2024 PBT was VND1.9tn (+4.3% QoQ). We see no material changes to our earnings forecast for TPB, pending a fuller review.
- H1 2024 credit growth was 4.2% compared to a decline of 3.0% in Q1 2024. TPB’s credit growth was weaker than system-wide growth of 6% in H1 2024 partly due to (1) the bank selling all loans related to a real estate developer to another institution and (2) weak credit demand from retail customers. A notable trend was that the bank started to increase its exposure to corporate bonds in Q2 2024 with the balance increasing to VND12.4tn vs VND9.3tn in Q1 2024.
- TPB’s H1 2024 deposits decreased by 2.5% and the total funding (including customer deposits, valuable papers, and interbank funding) was flat compared to Q4 2023. However, TPB’s regulated LDR remained at a low level of 67.8% - per our estimation. The Q2 2024 CASA ratio decreased by 2.3 ppts QoQ to 22.2% vs our full-year forecast of 23.2%.
- H1 2024 NIM increased 43 bps YoY to 3.97% due to (1) deposit growth being lower than credit growth, (2) a significant improvement in the CASA ratio, and (3) slower NPLs formation.
- H1 2024 NOII increased by 6.1% YoY and achieved 55% of our full-year forecast. This is due to (1) the pure NFI increasing by 10.7% YoY and (2) investment income increasing 58.4% YoY, outweighing the weak performance in FX trading activities and recovery income.
- H1 2024 OPEX decreased 12.8% YoY, which contributed to a strong improvement in the H1 2024 CIR at 34.4% (-11.9 ppts YoY).
- H1 2024 provision expenses were recorded at VND2.1tn (+211.8% YoY) but Q2 2024 provision expenses decreased 19.6% QoQ. Additionally, we believe TPB’s asset quality is trending up with the Q2 2024 (1) NPL ratio at 2.06% (-17 bps QoQ), (2) Group 2/gross loans at 2.61% (-7 bps QoQ), and (3) LLR at 66.0% (+ 5.7 ppts QoQ).
TPB’s consolidated H1 2024 results
VND bn | H1 2023 | H1 2024 | YoY | Q2 2023 | Q2 2024 | YoY |
NII | 5,466 | 6,660 | 21.8% | 2,545 | 3,233 | 27.0% |
Non-interest income | 2,110 | 2,240 | 6.1% | 1,372 | 983 | -28.3% |
OPEX | (3,510) | (3,059) | -12.8% | (1,931) | (1,383) | -28.4% |
PPOP | 4,067 | 5,841 | 43.6% | 1,987 | 2,833 | 42.6% |
Provision expenses | (683) | (2,130) | 211.8% | (368) | (949) | 157.8% |
NPAT-MI | 2,706 | 2,986 | 10.3% | 1,293 | 1,524 | 17.8% |
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Loan growth** | 10.0% | 4.0% | -6.0 ppts | 2.7% | 6.1% | 3.4 ppts |
Deposit growth** | 2.1% | -2.5% | -4.6 ppts | -1.0% | 5.8% | 6.8 ppts |
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NIM | 3.54% | 3.97% | 43 bps | 3.21% | 3.86% | 65 bps |
Interest-earning asset yield | 9.00% | 7.60% | -140 bps | 8.86% | 7.45% | -141 bps |
Cost of funds | 5.68% | 3.84% | -184 bps | 5.87% | 3.77% | -210 bps |
CASA ratio* | 16.4% | 22.2% | 5.8 ppts | 16.4% | 22.2% | 5.8 ppts |
CASA ratio plus term deposits in FX | 17.8% | 25.1% | 7.3 ppts | 17.8% | 25.1% | 7.3 ppts |
CIR | 46.3% | 34.4% | -11.9 ppts | 49.3% | 32.8% | -16.5 ppts |
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NPLs / Gross loans | 2.21% | 2.06% | -15 bps | 2.21% | 2.06% | -15 bps |
Group 2 loans / Gross loans | 3.51% | 2.61% | -90 bps | 3.51% | 2.61% | -90 bps |
Accrued interest / IEAs | 1.03% | 1.06% | 3 bps | 1.03% | 1.06% | 3 bps |
Source: TPB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q2 2023 and Q2 2024 loan and deposit growth is QoQ growth; H1 2023 and H1 2024 loan and deposit growth is 6M growth.
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