TPB – NIM improves, aggressive bad debts written off – Earnings Flash
  • 2024-01-19T00:00:00
  • Company Research

TPB released its results for 2023 with TOI of VND12.4tn (USD671mn; +4.0% YoY) and NPAT of VND4.5tn (USD184mn; -28.7% YoY), achieving 101.2% and 83.5% of our full-year forecasts, respectively. Q4 2023 NPAT was VND1.5tn (-60.8% QoQ and -67.5% YoY). We see a potential downside risk to our earnings forecast for TPB, pending a fuller review. 

• 2023 credit growth was strong at 19.0% YoY and concentrated in Q4 2023 with loan growth increasing 15.7% QoQ while corporate bonds decreased 23.4% QoQ. Three sectors that contributed most to Q4 2023 loan growth include (1) retail +13.7% QoQ, (2) construction +18.8% QoQ, and (3) real estate +7.2% QoQ. 

• TPB’s Q4 2023 CASA ratio improved by 5.4 ppts QoQ and 4.6 ppts YoY to 22.7%, higher than our expectations thanks to deposit rates achieving the lowest level over the last 20 years.  

• 2023 NIM achieved 3.92% (-6 bps YoY) but Q4 2023 NIM alone was 4.92% (+115 bps QoQ) thanks to (1) higher exposure to high-yield segments, (2) control deposit growth being lower than credit growth, (3) significant improvement in CASA, and (4) improvement in NPLs formation. 

• 2023 NFI including the gain from FX increased by 38.7% YoY mainly thanks to the 89.9% YoY increase in trading FX income while 2023 pure NFI decreased 10.0% YoY.  

• 2023 provision expenses were recorded at VND3.9tn (+114.0% YoY) and Q4 2023 provision expenses increased by 1,619.7% YoY. In addition, the 2023 TPB write-off was VND3.0tn (1.47% of 2023 TPB’s loan book). This indicates the bank’s incentive to clean up its balance sheet and improve the provision buffer (LLR ratio was 63.7%, + 16.7 ppts QoQ), which is earlier than our expectation.    

• Asset quality slightly improved on a QoQ basis while Q4 2023 NPL gross-up for write-off rate was 3.51% (-18 bps QoQ) and the other assets balance including accrued interests and receivables decreased 10.5% QoQ.


TPB’s consolidated 2023 results 

VND bn 

 2022 

 2023 

YoY 

Q4 2022 

Q4 2023 

YoY 

NII 

        11,387  

        12,425  

9.1% 

          2,780  

          3,996  

43.8% 

Non-interest income 

          4,231  

          3,809  

-10.0% 

             884  

             447  

-49.4% 

OPEX 

         (5,945) 

         (6,699) 

12.7% 

         (1,646) 

         (1,843) 

12.0% 

PPOP 

          9,672  

          9,535  

-1.4% 

          2,017  

          2,600  

28.9% 

Provision expenses 

         (1,844) 

         (3,946) 

114.0% 

            (115) 

         (1,970) 

1,619.7% 

NPAT-MI 

          6,261  

          4,463  

-28.7% 

          1,519  

             494  

-67.5% 

 

  

  

 

  

  

  

Loan growth** 

14.0% 

27.5% 

13.5 ppts 

3.4% 

15.7% 

12.3 ppts 

Deposit growth** 

39.7% 

6.8% 

-32.9 ppts 

23.1% 

7.4% 

-15.7 ppts 

 

  

  

 

  

  

  

NIM 

3.98% 

3.92% 

-6 bps 

3.77% 

4.92% 

115 bps 

Interest-earning asset yield 

7.61% 

9.02% 

141 bps 

8.18% 

9.55% 

137 bps 

Cost of funds 

3.77% 

5.32% 

155 bps 

4.55% 

4.84% 

29 bps 

CASA ratio* 

18.0% 

22.7% 

4.7 ppts 

18.0% 

22.7% 

4.7 ppts 

CASA ratio plus term deposits in FX 

19.2% 

23.7% 

4.5 ppts 

19.2% 

23.7% 

4.5 ppts 

CIR 

38.1% 

41.3% 

3.2 ppts 

44.9% 

41.5% 

-3.4 ppts 

 

  

  

 

  

  

  

NPLs / Gross loans 

0.84% 

2.05% 

121 bps 

0.84% 

2.05% 

121 bps 

Group 2 loans / Gross loans 

1.92% 

2.81% 

89 bps 

1.92% 

2.81% 

89 bps 

Accrued interest / IEAs 

1.04% 

1.16% 

12 bps 

1.04% 

1.16% 

12 bps 

Source: TPB, 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 12M growth. 

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