Two strategies to help TPBank maintain growth in the coming time

VnDirect believes that TPBank is one of the leading banks in the retail banking trend in Vietnam.

In the newly released analysis report, VnDirect believes that TPBank's business results in the first half of the year continue to remain positive.

According to the analysis team, the bank's net profit in the second quarter of 2022 reached VND 1,732 billion, up 37% year-on-year based on a 33% increase in total operating income. In which, non-interest income increased by 60% thanks to the recovery of insurance and service fees. Good business results in the second quarter contributed to a 26% increase in 6 months' accumulated profit, reaching VND 3,031 billion.

In addition, asset quality remained stable with a bad debt ratio of 0.85% at the end of the second quarter (0.8% at the end of 2021 and 1.1% at the end of the first quarter of 2022) and a bad debt coverage ratio. 162% at the end of June (153% at the end of 2021). TPBank also continues to aggressively handle bad debts (VND 1,095 billion, especially in the second quarter). With the above results, TPBank is still in the top 5 banks with good asset quality with the lowest NPL ratio and the top 6 highest NPL coverage ratio.

Forecasting the prospects, VnDirect believes that TPBank is one of the leading banks in the retail banking trend in Vietnam thanks to (i) the strategy of focusing on retail lending products, which has a high penetration rate. low in Vietnam, and especially (ii) a pioneer in digital transformation with a strong competitive advantage through simple and streamlined lending procedures. This helps the bank to expand its potential young customer base and grow deposit mobilization in the next 3 years.

In addition, the bank has also exploited the corporate bond market to take advantage of the strong growth potential of the current nascent capital market (TPBank is in the top 5 banks with the highest percentage of holding corporate bonds). industry-wide).

“Inflationary pressures and capital market scrutiny have raised concerns about the banking sector outlook over the past few months. However, we still think that TPBank will still maintain a solid foundation with good growth and profitability in the next three years (ROE from 20-21% in the period 2022-2024); and the bank's 2022 forward P/B is currently 1.4x, reflecting an attractive valuation," according to an analysis report by VnDirect.

Also according to this report, VnDirect forecasts TPBank's net profit will grow by 22%/24% in the period 2022-2023, reaching VND5,913 billion and VND7,337 billion, respectively. The securities company also expects the bank's fee income to increase by 20%/10% year-on-year in the period 2022-2023.