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Banking & Finance

TPBank back to life after restructure

Released at: 15:43, 05/05/2015

TPBank back to life after restructure

Bank now targets being among major industry players three years after changing the way it operates.

by Hung Khanh

Three years after beginning a process of restructuring following an extended period of poor performance, TPBank is now recording increased profits and falling non-performing loans and targets becoming one of the leaders in Vietnam’s banking sector.   

Grand targets

At its AGM on April 24, TPBank set the following targets for 2015: increasing total assets to VND70 trillion ($3.22 billion), or 40 per cent higher than in 2014, and mobilized capital to VND59.2 trillion ($2.73 billion), an increase of 126 per cent against 2014, outstanding credit to reach VND40.4 trillion ($1.86 billion), an increase of 170 per cent compared to 2014, and pre-tax profit of VND620 billion ($28.68 million), 115 per cent higher than in 2014. Non-performing loans are to be managed at less than 2 per cent.

Mr. Nguyen Hung, General Director of TPBank, told VET that enterprises are to be the bank’s priority, including small and medium-sized enterprises and enterprises in fields on the government’s prioritized list for development, such as agriculture, high-technology, and support industries.

Results of restructuring

As at the end of 2014 TPBank’s total assets stood at over VND51 trillion ($2.31 billion), an increase of 160 per cent compared with 2013, pre-tax profits reached VND536 billion ($24.79 million), accounting for 122 per cent of the plan, and non-performing loans were kept at under 2 per cent.

TPBank was the first to announce its first quarter results, at the April AGM, with cumulative profits of VND134 billion ($6.2 million), accounting for 103 per cent of the plan and an increase of 12 per cent year-on-year.

Capital mobilization increased nearly 11 per cent against the end of 2014 and was 64 per cent higher than in the same period last year. Credit provided in the first quarter increased nearly 5 per cent, 61 per cent higher, and non-performing loans fell to 0.99 per cent.

“Over the past year the bank has actively sought customers, improved its credit transparency, and strictly managed credit flows,” Mr. Hung said. Cards, investments, and foreign exchange activities all brought in profits. The bank also actively managed its non-performing loans by collecting those outstanding and not incurring any new bad debts, Mr. Hung said.

In commending banks that have successfully undergone internal restructuring, such as TPBank and the Vietnam Construction Bank (VNCB), Mr. Cao Sy Kiem, former Governor of the State Bank of Vietnam (SBV), told VET that the methods they chose to take were sound and in the right direction.

When restructuring, he went on, each bank holds different competitive advantages, such as in personnel or technology, which they must continue to use after restructuring to ensure continued development. In order to increase their financial capacity, the banks must continue to call for capital, expand their networks, upgrade their systems, and recruit talented personnel.

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