TPB – Lower NIM amid strong credit growth; asset quality slightly deteriorates in Q3 2024 - Earnings Flash
  • 2024-10-30T00:00:00
  • Company Research

TPB released its results for 9M 2024 with TOI of VND12.9tn (USD517mn; +9.6% YoY) and PBT of VND5.5n (USD219mn; +10.2% YoY), achieving 80.0% and 75.2% of our respective full-year forecasts. 9M 2024 bottom-line results were broadly in line with our projections due to strong pure NFI and well-controlled operating expenses outweighing the surge in provision expenses. On a QoQ basis, Q3 2024 PBT was VND1.7tn (-9.2% QoQ). We see no material changes to our earnings forecast for TPB, pending a fuller review. 

  • 9M 2024 credit growth was 13.8% compared to its 6M 2024 credit growth of just 4.2%In which, 9M 2024 loan growth was 14.4% and corporate bonds were relatively flat compared to the end of 2023. We note that TPB’s credit growth was weak in 6M 2024 partly due to the bank selling loans related to a real estate developer to another institution. The strong credit growth in Q3 2024 was driven by manufacturing segment (+10.1% QoQ), wholesale and retaitrade segment (+17.6% QoQ)transportation  (+10.2% QoQ) and household customer (+7.7% QoQ).   

  • TPB’s 9M 2024 deposits increased by 8.0%, which was slower than credit growth. However, we estimate that TPB’s regulated LDR remained at a low level of 69.1%. The Q3 2024 CASA ratio decreased by 2.9 ppts QoQ to 19.3%. 

  • 9M 2024 NIM decreased 11 bps YoY to 3.75%. On a QoQ basis, Q3 2024 NIM decreased 26 bps to 3.61%This trend is similar with some other retail-focused banks. We believe that strong credit growth in Q3 2024 should be supported by a low lending rate, particularly amid intense competition. 

  • 9M 2024 NOII increased by 8.6% YoY and achieves 76% of our full-year forecast. This is due to pure NFI increasing by 49.9% YoY, outweighing the weak performance in FX, investment activities, and recovery income.  

  • 9M 2024 OPEX decreased 7.6% YoY due to the YoY reduction in salary and administration expenses. This contributed to a strong improvement in the 9M 2024 CIR of 34.7% (-6.5 ppts YoY). 

  • 9M 2024 provision expenses were recorded at VND3.0tn (+50.2% YoY) but the provision expenses have been reduced over the past three quarters. Q3 2024 provision expenses decreased 11.7QoQ 

  • TPB’s asset quality slightly deteriorated in Q3 2024 with (1) an NPL ratio of 2.29% (+23 bps QoQ) and (2) LLR of 58.9%(-7.1 ppts QoQ). However, its (3) Group 2/total loans was 2.22% (-40 bps QoQ).  

TPB’s consolidated 9M 2024 results 

VND bn  

 9M 2023  

 9M 2024  

 YoY  

 Q3 2023  

 Q3 2024  

 YoY  

 NII  

8,956 

9,838 

9.9% 

3,490 

3,178 

-8.9% 

 Non-interest income  

2,835 

3,079 

8.6% 

724 

839 

15.8% 

 OPEX  

(4,855) 

(4,485) 

-7.6% 

(1,346) 

(1,426) 

6.0% 

 PPOP   

6,935 

8,431 

21.6% 

2,869 

2,590 

-9.7% 

 Provision expenses  

(1,976) 

(2,968) 

50.2% 

(1,293) 

(838) 

-35.2% 

 NPAT-MI   

3,969 

4,368 

10.1% 

1,263 

1,382 

9.5% 

 

 

 

 

 

 

 

 Loan growth**  

11.8% 

14.4% 

2.6 ppts 

1.8% 

10.4% 

8.6 ppts 

 Deposit growth**   

-0.6% 

8.0% 

8.6 ppts 

-2.8% 

10.5% 

13.3 ppts 

 

 

 

 

 

 

 

 NIM  

3.86% 

3.75% 

-11 bps 

4.40% 

3.61% 

-79 bps 

 Interest-earning asset yield  

9.20% 

7.28% 

-192 bps 

9.37% 

7.18% 

-219 bps 

 Cost of funds  

5.56% 

3.74% 

-182 bps 

5.16% 

3.80% 

-136 bps 

 CASA ratio*  

17.3% 

19.3% 

2.0 ppts 

17.3% 

19.3% 

2.0 ppts 

 CASA ratio plus term deposits in FX     

18.6% 

21.9% 

3.3 ppts 

18.6% 

21.9% 

3.3 ppts 

 CIR  

41.2% 

34.7% 

-6.5 ppts 

31.9% 

35.5% 

3.6 ppts 

 

 

 

 

 

 

 

 NPLs / Gross loans    

2.97% 

2.29% 

-68 bps 

2.97% 

2.29% 

-68 bps 

 Group 2 loans / Gross loans   

3.77% 

2.22% 

-155 bps 

3.77% 

2.22% 

-155 bps 

 Accrued interest / IEAs   

1.07% 

1.01% 

-6 bps 

1.07% 

1.01% 

-6 bps 

Source: TPB, 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 6M growth. 

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