TPBank Chairman: The Banking Sector Will "Breakthrough and Thrive, Flourish Brilliantly"

TPBank has clearly demonstrated its determination by pioneering in financing BOT projects, especially the Huu Nghi - Chi Lang expressway project. Not only focusing on infrastructure, the bank has also accelerated its lending for social housing (NOXH) and green credit. With the momentum of growth rising in line with the Prime Minister's directives, the entire banking sector is sure to "breakthrough and shine brightly."

This was the statement of Mr. Do Minh Phu, Chairman of the Board of Directors of TPBank, at the Government Standing Committee Conference on February 11, where commercial banks were urged to accelerate, break through, boost growth, and control inflation.

Resolving Funding Bottlenecks for BOT Projects

Sharing at the conference, Chairman Do Minh Phu stated: Recently, TPBank has actively participated in financing many important Build-Operate-Transfer (BOT) projects, playing a crucial role in the development of national transportation infrastructure. One of the flagship projects is the Huu Nghi - Chi Lang expressway.

After thorough calculations and evaluations, TPBank decided to provide funding up to VND 2,500 billion and committed to disburse the funds within this week. This demonstrates TPBank’s proactive approach and responsibility in resolving difficulties for the project to ensure construction progress, contributing to the goal of building 3,000 km of expressways by 2025, even though the public capital ratio has yet to be adjusted to 70:30.

If the Dong Dang - Tra Linh project has been approved by the Government to increase the public capital ratio to 70%, the Huu Nghi - Chi Lang project has yet to see this adjustment. This has made investors hesitant to move forward with the project, while banks are also under pressure to recover capital. Alongside providing funding, TPBank has suggested that the Government review and adjust the funding ratio for this project.

In fact, TPBank has not only focused on the Huu Nghi - Chi Lang project but has also financed several other key infrastructure projects such as Cam Lam - Vinh Hao, the coastal road of Thai Binh, Nam Dinh, Hai Phong, and Route 830 in Long An. The total credit balance for BOT projects at TPBank has reached VND 7,897 billion, highlighting the bank's active role in supporting national infrastructure development.

However, the bank's leader believes that one of the biggest obstacles for banks financing BOT projects is the credit room limit. Currently, funding for these projects is counted against the general credit limit, making it difficult for TPBank and other banks to expand their support. Therefore, TPBank has proposed that the State Bank of Vietnam consider exempting credit room limits for BOT loans, facilitating easier participation from credit institutions in infrastructure investments.

Prime Minister Pham Minh Chinh discussing with bank leaders on the sidelines of the Government Standing Committee Conference, working with commercial banks to accelerate, break through, promote growth, and control inflation - Photo: VGP/Nhat Bac

Ready to Support Green Credit and Social Housing

In addition to BOT projects, Chairman Do Minh Phu of TPBank emphasized that the bank is particularly focused on green credit and social housing—two strategic areas for sustainable economic development.

TPBank's leadership analyzed that green credit is becoming an inevitable trend, especially when many international markets have set stringent environmental standards for imported goods. Recognizing this, TPBank has ramped up funding for clean energy projects, sustainable production, and environmentally friendly buildings. By the end of 2024, the bank had disbursed nearly VND 7,400 billion for green credit projects, making an important contribution to the economy's green transformation.

In the social housing sector, TPBank is one of the pioneer banks participating in the VND 145,000 billion lending program under Resolution 33/NQ-CP. With the goal of enabling low-income people to access housing, the bank has committed to providing VND 5,000 billion, with nearly VND 800 billion disbursed in the first phase.

"Although TPBank has made significant efforts to support social housing, the implementation process still faces many obstacles, especially regarding legal procedures and matching capital sources. Therefore, the bank hopes the Government can offer better policies, such as simplifying licensing procedures and increasing land funds for social housing. This would not only help people access housing more easily but also promote the right development of credit," said Chairman Do Minh Phu.

Mr. Phu affirmed that TPBank has demonstrated its pioneering role in financing BOT projects, green credit, and social housing, contributing to infrastructure development and sustainable economic growth. However, to achieve even greater effectiveness in these programs, the bank hopes for support from the Government and the State Bank of Vietnam in adjusting the public capital ratio, exempting credit room limits for BOT loans, and improving the legal framework for social housing.

Mr. Do Minh Phu, Chairman of the Joint Stock Commercial Bank for Investment and Development (TPBank), speaking at the conference - Photo: VGP/Nhat Bac

Leveraging the Macro-Economic Environment to Contribute to Growth

Speaking frankly at the conference, Mr. Do Minh Phu, Chairman of TPBank, said: In the current context, economic and credit growth targets are challenging tasks.

However, TPBank’s leadership believes that, based on the reality, there are enough grounds to assess that these goals are achievable, and achieving them will contribute to the Government's overall target of GDP growth of at least 8%.

TPBank’s leadership analyzed that Vietnam’s economy is entering a clear recovery and development cycle. GDP has grown by more than 7%, and especially the three pillars supporting the economy’s recovery are: exports, investment, and consumption. Last year, exports reached approximately USD 405 billion, and the country's total import-export turnover was around USD 786 billion.

This is a very important foundation that demonstrates the results of the Prime Minister’s strong leadership and the active involvement of ministries and sectors. In fact, only with growth can businesses absorb capital. If the economy does not develop, no matter how much effort is made, including offering low lending rates, businesses and citizens cannot be sure to use bank capital.

Following the Government's policy, recently, the State Bank of Vietnam has improved and applied the credit rating mechanism for banks based on international CAMELS criteria, increasing banks’ flexibility.

In 2024, TPBank’s credit growth is expected to reach around 20.25%, which is higher than the industry-wide growth rate, because for A-rated banks, the State Bank has flexibly allowed the most reasonable calculation.

Commercial banks, including TPBank, are following a strategy of three reductions: reducing lending interest rates (in 2024, TPBank has reduced around VND 1,900 billion for about 92,000 customers on total outstanding loans of VND 183,000 billion to support the economy and businesses); simplifying procedures; and reducing internal processes that are not suitable while applying technology to use big data for better decision-making.

With this "three reductions" strategy, TPBank continues to grow its credit while keeping non-performing loans under control at 1.4%.

A representative of TPBank stated: Banks, in general, are aware of the importance of accompanying and sharing the difficulties with businesses.

"With the Government’s decisive direction, the banking sector’s determination, and the economy entering a recovery phase, I believe that achieving the 16% credit growth target set by the State Bank of Vietnam is entirely feasible," said Mr. Do Minh Phu.

On behalf of the bank, Mr. Phu affirmed: With a commitment to accompanying the country’s development, TPBank continues to pledge strong financial resources to help Vietnam achieve its socio-economic goals in the coming period.

"Because the common goal of the whole system, especially commercial banks, is to 'breakthrough.' With this breakthrough spirit, we will definitely succeed because the timeline will be shortened, the pace will be accelerated, and only then can we drive growth and control inflation effectively," Mr. Do Minh Phu emphasized.