- 2024-04-25T00:00:00
- Company Research
VPB released its Q1 2024 results with consolidated PBT of VND4.2tn (USD168mn; +64% YoY) which achieves 25% of our full-year forecast. Q1 2024 parent bank’s PBT was VND4.9tn (USD197mn; +20% YoY). Overall, the profit tracked in line with our expectations mainly due to (1) a strong rebound in NII and (2) a YoY decrease in provision expenses. However, FEC's Q1 performance was quite weak vs its AGM guidance. We estimate that FEC could have recorded a loss of around VND1tn in Q1 2024 after breaking even and made some minor profit in H2 2023.
- The parent bank’s Q1 2024 credit growth (including customer loans and corporate bonds) was 2.2% (loan growth of 3.0%). As of Q1 2024, the corporate bond balance at the parent bank decreased 14% vs 2023 to VND20.2tn (USD809mn), accounting for 3.8% of the total credit balance.
- Q1 2024 consolidated deposit growth was 3.0%, which was driven by retail customer deposits. In addition, the consolidated CASA ratio was 14.4% (flat YoY and -3 ppts QoQ).
- Q1 2024 consolidated NIM was 5.81% (6 bps QoQ) vs our full-year forecast of 6.08%. We expect NIM to improve in the rest of 2024F from a low base. We note that VPB’s NIM was distorted in Q3 2023 last year due to new equity issuance.
- VPB’s Q1 2024 VAMC bond balances were flat QoQ at VND4.3tn (0.5% of total assets) We recall that VPB recorded VAMC bonds in Q4 2023 for the first time since 2018 amid high bad debt ratios.
- Q1 2024 NOII decreased 26% YoY and tracked slightly behind our expectation due to a loss in trading investment and weaker-than-expected recovery income from written-off bad debts at both the parent bank and FEC.
- Q1 2024 CIR of 25.8% was among the low-end in our coverage and OPEX was in line with our expectation.
- On a QoQ basis, the NPL ratio slightly decreased, but Group 2 loans spiked. The Q1 2024 consolidated NPL ratio was 4.84% (-17 bps QoQ; -141 bps YoY). Group 2 loans to gross loans were 8.30% (+141 bps QoQ; +9 bps YoY), which was mainly contributed by retail loans (i.e., mortgages). In addition, Q1 2024 consolidated write-offs to gross loans decreased 2.2 ppts YoY to 3.6%.
- We estimate that FEC’s Q1 2024 loan book was relatively flat QoQ and decreased 6% YoY. VPB stated that FEC’s disbursement activities have bounced back in Q1 2024 with disbursement volume increasing 29% vs 2023’s average. Though FEC’s bad debt metrics reduced QoQ, they remain at a relatively high level, which signals persisting high pressure on credit costs.
- Q1 2024 provision expenses decreased 9.8% YoY and completed 19% of our full-year forecast. VPB expects 2024F provision expenses to be flat or slightly decrease from a high base in 2023 and Q1 provision expenses seem to be on track with the bank’s guidance. However, VPB’s current bad debt metrics indicate a modest improvement in asset quality to us and we expect potential upward pressure on credit costs in coming quarters.
Figure 1: VPB’s consolidated Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY |
NII | 9,534 | 11,323 | 18.8% |
Non-interest income | 2,825 | 2,087 | -26.1% |
OPEX | (3,423) | (3,467) | 1.3% |
PPOP | 8,936 | 9,944 | 11.3% |
Provision expenses | (6,386) | (5,762) | -9.8% |
NPAT-MI | 1,650 | 3,142 | 90.4% |
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Loan growth** | 5.7% | 2.9% | -2.8 ppts |
Deposit growth** | 9.2% | 3.0% | -6.2 ppts |
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NIM | 6.25% | 5.81% | -44 bps |
Interest-earning asset yield | 11.82% | 9.93% | -190 bps |
Cost of funds | 6.41% | 4.93% | -148 bps |
CASA ratio* | 14.2% | 14.4% | 0.2 ppts |
CASA ratio plus term deposits in FX | 14.6% | 14.6% | 0.0 ppts |
CIR | 27.7% | 25.8% | -1.8 ppts |
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NPLs / Gross loans | 6.24% | 4.84% | -141 bps |
Group 2 loans / Gross loans | 8.22% | 8.30% | 9 bps |
Accrued interest / IEAs | 1.36% | 1.14% | -22 bps |
Source: VPB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q1 2023 and Q1 2024 loan and deposit growth is QoQ growth.
Figure 2: VPB’s standalone Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY |
NII | 6,579 | 8,222 | 25.0% |
Non-interest income | 1,963 | 1,604 | -18.3% |
OPEX | (1,996) | (2,419) | 21.2% |
PPOP | 6,546 | 7,407 | 13.2% |
Provision expenses | (2,429) | (2,486) | 2.3% |
NPAT-MI | 3,293 | 3,936 | 19.5% |
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Loan growth** | 9.2% | 3.0% | -6.2 ppts |
Deposit growth** | 7.8% | 3.0% | -4.9 ppts |
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NIM | 4.72% | 4.50% | -22 bps |
Interest-earning asset yield | 10.12% | 8.51% | -161 bps |
Cost of funds | 6.07% | 4.72% | -135 bps |
CASA ratio* | 14.5% | 14.6% | 0.2 ppts |
CASA ratio plus term deposits in FX | 14.9% | 14.8% | 0.0 ppts |
CIR | 23.4% | 24.6% | 1.3 ppts |
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NPLs / Gross loans | 3.42% | 3.31% | -11 bps |
Group 2 loans / Gross loans | 7.46% | 7.80% | 33 bps |
Accrued interest / IEAs | 1.38% | 1.09% | -28 bps |
Source: VPB, Vietcap — *CASA volume included demand deposits and margin deposits; ** Q1 2023 and Q1 2024 loan and deposit growth is QoQ growth.
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