Where does TPBank's nearly 3,800 billion profit come from?

TPBank ended the first 6 months of the year positively with pre-tax profit of nearly 3,800 billion dong. This is the bank's record high semi-annual profit.

Tien Phong Commercial Joint Stock Bank (TPBank – Code: TPB) recently announced its financial statements for the second quarter with pre-tax profit of VND 2,165 billion, up 36.6% over the same period last year. Accumulated in the first 6 months, TPBank's profit increased by 26% to a record of VND3,788 billion. With this result, the bank has fulfilled more than 46% of its profit plan for the whole year 2022.

In the first 6 months, TPBank's net interest income reached VND5,866 billion, up 22.5% over the same period and contributing nearly 72% of total banking income. This was driven by strong credit expansion and a strong NIM.

TPBank's non-interest income also recorded impressive results thanks to the breakthrough in services (1,192 billion dong) and foreign exchange business (211 billion dong). Specifically, net profit from service activities increased by nearly 72%, mainly from net profit from payment segment with more than VND 600 billion, up 273% over the same period. Net profit from foreign exchange business recorded an increase of more than 34%, in the second quarter, the bank made a profit of 179 billion dong from this segment. Other business activities brought in a profit of VND378 billion thanks to collected debts.

Combining business segments, TPBank's operating income in the first half of the year reached VND 8,189 billion, up 31.4%. After deducting operating expenses of more than 3,000 billion dong, the bank's net profit was 5,188 billion dong, 29.4% higher than the same period in 2021.

Thanks to this prosperity, despite having to increase provision expenses by nearly 40%, the bank still had a pre-tax profit of nearly VND3,788 billion, up 26%.

By the end of June, TPBank's total assets increased by 6.1% to nearly VND 310,772 billion. In which, outstanding loans to customers increased by 6.5% to 151,435 billion (including debt purchase). Customer deposits increased by 12%, much higher than the overall growth of the banking industry.

At the end of the second quarter, TPBank's bad debt ratio continued to remain below 1% (0.85%), among the lowest in the banking industry. At the same time, the bad debt coverage ratio increased from nearly 153% at the end of 2021 to more than 161%.

This year, TPBank boosted investment and reduced dependence on interbank money, causing a difference in net cash flow from the bank's business activities compared to 2021. In the first 6 months of the year, cash flow mobilized from Customers still grew steadily at VND 16,774 billion, not much change compared to the growth of VND 16,159 billion in the same period last year. However, mobilization from the interbank market in the first 6 months of 2022 decreased by VND 3,887 billion compared to an increase of VND 11,392 billion in the first 6 months of 2021, showing that TPBank has developed a strong customer network and attracted a large number of customers. Operating money from customers helps reduce dependence on the interbank market.

The bank's customer loans did not change much compared to the same period last year, growing by 7%. Meanwhile, cash flow from securities trading in the first 6 months of 2022 had large fluctuations compared to the same period last year when the bank expanded its investment scale with an increase of 22.6% as of June 30, 2022 compared to the same period last year. an increase of 2.7% as of June 30, 2021. Besides tightening the credit room of the State Bank, TPBank has effectively used the money mobilized from customers as well as the idle cash flow from different sources to invest in other profitable channels. positive business results for the bank with profit after tax recorded at 1,731 billion dong.

In 2022, TPBank aims to increase profit by about 36% compared to 2021, equivalent to VND 8,200 billion. Total planned assets will reach VND 350,000 billion, up 20% compared to the end of 2021. Loan balance is expected to reach VND 188,800 billion, up 18%. Total deposit value reached 292,579 billion dong, equivalent to 12% increase, of which customer deposits increased by 15% and reached over 201 trillion dong.

As one of the banks with a low bad debt ratio in the system, in 2022, TPBank continues to aim to maintain this ratio at no more than 1.5%.

According to analysts, TPBank is a young and dynamic private bank that actively innovates in products and technology. With efforts in digital transformation and pioneering in product design, the bank will attract many new users and thus fully meet and exceed its business targets.

In fact, TPBank added nearly 1.5 million new customers in the first half of the year, equivalent to a growth of 25%, bringing the total number of customers that the bank is serving to more than 6 million customers.

‘‘The strong customer base not only supports TPBank to expand its CASA balance (helps with capital expenditure), especially from the individual customer group, which is more sustainable than the corporate customer group; but also brings more opportunities for cross-selling, which is definitely beneficial for non-interest income growth”, said Bao Viet Securities.

Sharing the same view, SSI Research believes that TPBank has made steady progress in its digitalization journey. In the second quarter of 2022, TPBank added about 800,000 new customers, bringing the existing customer base to 6 million individual customers and more than 65,000 corporate customers.

Sharing the same opinion, SSI Research believes that TPBank has continuously made steady progress in its digitalization journey. In the second quarter of 2022, TPBank added about 800,000 new customers, increasing the existing customer file to 6 million individual customers and more than 65,000 corporate customers.

In a recent release report, Vietcombank Securities (VCBS) also said that the strategy of focusing on young customers helps TPBank to grow demand deposits. This will be a support for maintaining deposit costs in the face of a slight increase in term deposit interest rates.

According to VCBS, in the period 2015 - 2021, TPB witnessed CASA grow four times, from nearly 7,500 billion VND to nearly 31,000 billion VND. Thanks to its focus on digital transformation and pioneering in the design of 0-dong transaction products, TPBank mainly attracts young individual customers who love to experience technology and save transaction costs.

VCBS quoted the Bank's Board of Directors as saying that TPBank is the first bank that can perform 2 million transactions per minute, linking with many banks and partners on an online transaction platform, meeting the needs of customers. transactions of young people, especially on shopping promotion days like Black Friday, etc. TPBank's leadership is confident that its pioneering digital technology always has a certain advantage, far ahead of competitors who are designing products similar products. TPBank's IT team can self-deploy digital projects such as eKYC without direct staff support, etc.

In addition, TPBank has introduced to the market about 400 live banking transaction points "LiveBank", which helps reduce physical costs (renting transaction locations) and personnel costs to perform transactions such as withdrawing/depositing. , money transfer over the counter, etc. From there, reducing operating costs for the bank.