VPBank 2023: Navigating Challenges and Achieving Growth Amidst Market Pressures

In 2023, VPBank demonstrated resilience and financial growth despite a challenging market environment. The bank achieved a significant increase in its semi-annual profit, up by 19% from the previous year, reaching approximately 637.5 billion VND (converted from CHF 25.5 million). This growth is notable, especially considering the increase was 35% higher than in the second half of 2022. VPBank's operating income also saw a significant rise, increasing by 17% to approximately 4,707.5 billion VND (converted from CHF 188.3 million).

The positive market environment in the first half of the year contributed to a 2% increase in client assets under management, reaching CHF 47.2 billion. However, the bank experienced some challenges, including forced outflows due to adjustments in client portfolios, particularly noting a new money outflow of CHF 0.3 billion from clients connected to Russia. Despite these challenges, net new money inflow was positive, at CHF 0.1 billion.

Operational expenses increased by 14% compared to the previous year, totaling approximately 3,955 billion VND (converted from CHF 158.2 million). This rise was attributed to various factors, including investments, credit provisions against the backdrop of the economic environment, and a general inflation-related increase in costs. Nonetheless, the cost/income ratio saw an improvement from 85.7% to 84.0%.

VPBank's capitalization and liquidity remained robust, with a tier 1 ratio of 23.4% and a liquidity coverage ratio of 202.2%. The bank is on track with its Strategy 2026, aiming for annual income growth of 4 to 6%, annual net new money growth of at least 4%, a tier 1 ratio of over 20%, and a cost/income ratio of under 75% by 2026.

Despite these achievements, VPBank faced some pressures in the third quarter of 2023. The bank's pre-tax profit was projected to be 3.3 trillion VND, a decrease of 27% from the previous year. This decline was attributed to factors like asset quality issues and the slow recovery of the Net Interest Margin (NIM). However, a positive aspect of VPBank's performance in Q3 2023 was the notable results from its subsidiary FE Credit. The bank's credit growth exceeded 20%, higher than the industry average.

The bank's overall performance reflects its ability to navigate a challenging environment while maintaining a focus on strategic growth and profitability.