TPBank's head office in Hà Nội. The bank has lowered its profit forecast in 2020 on worries about the economic impact of COVID-19. — VNA/VNS Photo Trần Việt
HÀ NỘI — Tiên Phong Joint Stock Commercial Bank (TPBank) is targeting pre-tax profit growth of 5 per cent on-year to VNĐ4.07 trillion (US$174.2 million) in 2020, lower than previously forecast, on worries that the economy is suffering from the global COVID-19 pandemic.
The bank is looking at 15 per cent annual credit growth in 2020, which may reach VNĐ117.2 trillion. Of the figure, total lending is expected to gain 9 per cent to VNĐ105.2 trillion.
From January-April, TPBank recorded a total profit of VNĐ1.2 trillion, equal to 30 per cent of the annual target, while total lending growth reached 11 per cent, almost accomplishing the target of 11.5 per cent set by the State Bank of Vietnam (SBV).
TPBank will invest further in bonds issued by economic institutions, raising the total value of bond investment to VNĐ12 trillion at the end of the year – 2.5 times the amount made last year.
The non-performing loan ratio is expected to stay below 2.5 per cent in 2020. Capital raising is forecast to increase by 7 per cent to VNĐ158.5 trillion in 2020, of which individual savings will be up 15 per cent on-year to VNĐ122.7 trillion while institutional saving and borrowing will fall 13 per cent on-year.
The bank had set “more ambitious” profit targets in 2020 but the pandemic had made the board of directors revise its plans, Chairman Đỗ Minh Phú told the meeting on Wednesday.
TPBank would seek higher revenues from other activities such as services and bancassurance in addition to lending interest to keep its business stable, he said.
Revenue from financial services was almost zero during the social-distancing period in early April, the chairman said, adding the situation had improved since then but was not good as expected.
The impact of COVID-19 had toppled the forecast, he said, adding small- and medium-sized enterprises (SMEs) had been weighed down by the disease.
TPBank would minimise the costs, suspend recruitment and pay rises in 2020, and ask for higher productivity from employees, Phú said, assuring there would be no salary cuts this year.
TPBank also plans to sell bonus shares at a rate of 20 per cent to increase its charter capital by more than 1.63 trillion to VNĐ10.2 trillion in 2020.
The deal is scheduled for the third or fourth quarter of the year, aiming to improve the bank’s financial capacity, expand its market share, and meet the demand for medium- and long-term loans.
The capital hike was passed by shareholders at the 2019 annual meeting but the deal was not completed because the bank failed to attract investors due to the downturn of the Vietnamese stock market last year. — VNS