With the advantage of being a leading digital bank, TPBank has come up with flexible business solutions in the context of the Covid-19 pandemic, allowing it to manage risks and maintain sustainable growth in the last three quarters. As a result, at the end of the third quarter, the total operating income of TPBank reached VND 7,103 billion, showing an increase of 22.79% from its same term last year. Meanwhile, compared to the same period of 2019, the operating expenses increased by only 19.64%, lower than the growth rate of the bank's revenue. Also, TPBank’s cost-to-income (CIR) ratio has declined significantly. The above results led to a pre-tax profit of VND3,024 billion for TPBank, up 25.78% over the same period last year, and equivalent to 74.33% of the year plan approved by the general meeting of shareholders.
The bank's total assets rose by nearly 26% over the same period of 2019, reaching over VND 193 trillion. Total deposits increased by 25.24%, reaching VND 173,445 billion. Credit outstanding balance reached VND 124 trillion, which was within the credit growth limits approved by the State Bank.
Along with promoting business activities, TPBank has drastically applied risk management techniques to cope with uncertainties during the global pandemic. Specifically, TPBank was one of the first banks to fully implement risk management methods according to Basel II standards.
As of the end of September, the bad debt ratio of TPBank continued to be controlled below 2%. Contrary to prior concerns regarding the slower economic growth, the low bad debt ratio proved the effectiveness of TPBank's efforts in controlling and preventing risks. Also, TPBank is, currently, one of the banks with a high capital adequacy ratio (CAR). By the end of August 2020, the CAR of TPBank reached 10.81% according to Basel II standards, much higher than the ratio of 8% as regulated by the State Bank.
TPBank’s success in maintaining such effective operations could be attributed to its sustainable financial systembuilt in many years as well as its flexibility in dealing with new challenges. The bank has taken advantage of its position as a digital bank, allowing it to diversify revenue. Particularly, revenue from service activities was more than VND 809 billion, accounting for 11.4% of its total operating income and 26.8% of its total pre-tax profit. The biggest contributors to the bank’s service revenue came from collecting payment and service fee as well as selling insurance products.
The above profit growth and capital adequacy ratios have strengthened TPBank's position as one of the most efficient and safest banks in the system, with return on equity (ROE) and return on assets (ROA) of 22.63% and 1.80%, respectively.
The above figures indicate a sustainable growth rate even though the domestic economy has been hit hard by two outbreaks of Covid-19 disease, causing difficulties for many businesses.
To help customers survive the difficult time as well as following the instructions of the Prime Minister and the State Bank of Vietnam, TPBank has implemented many customer support programs since the beginning of this year. Specifically, TPBank has launched a preferential interest rate program, offering a loan interest rate that is 1.5-2.5% lower than the current interest rate for new corporate and individual customers and with the total loan outstanding balance of up to 12,000 billion.
In addition, along with the measures to restructure debt and reschedule principal, the bank has reduced interest rates by 0.5% to 1% for current customers that are severely affected by the pandemic, with the total loanoutstanding balance of up to VND 30,000 billion. TPBank has also contributed over VND 10 billion to join hands with the whole country in the fight against the Covid-19 pandemic.
The Bank's efforts since the beginning of this year have been recognized by domestic and international organizations. Bank of New York Mellon recently honored TPBank with a Straight Through Processing Award.Besides, Ripple also awarded TPBank the Customer Impact Award for being the first bank in Vietnam to succeed in applying blockchain technology to international money transfers from the end of 2019.
With the results gained in the third quarter of 2020, TPBank hopes to achieve the profit target set out this year, which is expected to create a strong basis for further sustainable growth of the bank in the coming years.
VietnamFinance - Translated by VietnamCredit