TPB – Earnings back to growth trajectory and improved asset quality

TPB released its results for 2024 with TOI of VND18.0tn (USD722mn; +11.1% YoY) and PBT of VND7.6n (USD304mn; +36.0% YoY), achieving 111% and 106% of our respective full-year forecasts. Overall, 2024 results were broadly in line with our projections in terms of NII while NOII exceeded expectations, driven by strong investment income and recovery income from previously written-off bad debts. On a QoQ basis, Q4 2024 PBT was VND2.1tn (+23.5% QoQ). We see no material changes to our earnings forecasts for TPB, pending a fuller review.

2024 credit growth was 20.2% compared to its 9M 2024 credit growth of 13.8%. In which, 2024 loan growth was 22.0% and corporate bonds decreased 15.2% compared to the end of 2023. As of the end of 2024, TPB’s exposure to corporate bonds was just 2.5% of total assets (-94 bps YoY). The strong credit growth in 2024 was primarily driven by business clients rather than consumer clients, with significant contributions from the manufacturing segment (+52.2% YoY), wholesale and retail trade segment (+57.7% YoY), and real estate trading (+31.7% YoY).
TPB’s 2024 deposits increased by 16.6%, which was slower than credit growth. A breakdown by customer type reveals a significant increase in deposits from SOE corporates, rising from VND9tn (4.3% of TPB’s customer deposits) to VND29tn (11.9% of TPB’s customer deposits). This suggests that the bank successfully acquired new corporate customers.
Q4 2024 CASA ratio improved QoQ to 22.2% (+2.0 ppts QoQ).
2024 NIM decreased 41 bps YoY to 3.51%. On a QoQ basis, Q4 2024 NIM decreased 94 bps to 2.67%. This trend is similar with some other retail-focused banks. We believe TPB's low NIM is due to (1) strong credit growth in Q4 2024, (2) competitive lending rates, and (3) an increased proportion of corporate lending.
2024 NOII increased by 34.7% YoY and achieves 121% of our full-year forecast. This outperformance was primarily driven by gains from investment activities (+27.9% YoY) and a doubling of recovery income from written-off bad debts. Meanwhile, pure NFI aligned with our expectations, fulfilling 101% of our forecast and growing by 47.6% YoY.
TPB effectively managed its operating expenses in 2024, achieving a CIR of 34.8%, compared to 41.3% in the previous year.
TPB’s asset quality improved YoY and QoQ in Q4 2024 with an NPL ratio of 1.52% (-53 bps YoY and -77 bps QoQ) and Group 2/total loans was 1.77% (-104 bps YoY and -45 bps QoQ). Additionally, 2024 provision expenses were relatively flat YoY with the Q4 2024 LLR ratio improving to 81.3% (+17.6 ppts YoY and +22.5 ppts QoQ).

TPB’s consolidated 2024 results

VND bn	2023	2024	YoY	Q4 2023	Q4 2024	YoY
NII	12,425	12,906	3.9%	3,469	3,068	-11.6%
Non-interest income	3,809	5,132	34.7%	974	2,053	110.7%
OPEX	(6,699)	(6,279)	-6.3%	(1,843)	(1,794)	-2.7%
PPOP	9,535	11,759	23.3%	2,600	3,327	28.0%
Provision expenses	(3,946)	(4,159)	5.4%	(1,970)	(1,191)	-39.6%
NPAT-MI	4,463	6,074	36.1%	494	1,705	245.2%

Loan growth**	27.5%	22.0%	-5.5 ppts	15.7%	7.6%	-8.1 ppts
Deposit growth**	6.8%	16.6%	9.8 ppts	7.4%	8.6%	1.2 ppts

NIM	3.92%	3.51%	-41 bps	3.66%	2.67%	-99 bps
Interest-earning asset yield	9.02%	7.05%	-197 bps	8.90%	7.13%	-177 bps
Cost of funds	5.32%	3.77%	-155 bps	4.84%	4.23%	-61 bps
CASA ratio*	22.7%	22.2%	-0.5 ppts	22.7%	22.2%	-0.5 ppts
CASA ratio plus term deposits in FX	23.7%	24.5%	0.8 ppts	23.7%	24.5%	0.8 ppts
CIR	41.3%	34.8%	-6.5 ppts	41.5%	35.0%	-6.5 ppts

NPLs / Gross loans	2.05%	1.52%	-53 bps	2.05%	1.52%	-53 bps
Group 2 loans / Gross loans	2.81%	1.77%	-104 bps	2.81%	1.77%	-104 bps
Accrued interest / IEAs	1.16%	0.81%	-35 bps	1.16%	0.81%	-35 bps

Source: TPB, Vietcap — *CASA volume includes demand deposits and margin deposits; ** Q4 2023 and Q4 2024 loan and deposit growth is QoQ growth; 2023 and 2024 loan and deposit growth is 12M growth.