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Vietnam Prosperity Commercial Bank: Vietnam Stock Overview

Vietnam Prosperity Commercial Bank, listed on the Ho Chi Minh Stock Exchange under the ticker VPB, is one of Vietnam’s leading private banks.

In the first half of 2024, VPB’s total operating income rose by 17.5 percent, reaching US$1.2 billion and profit before tax increased by 67.9 percent reaching US$350.5 million. Of which, net interest income increased by 29.7 percent.

However, the bad debt ratio rose from 5.01 percent at the end of 2023 to 5.08 percent by the second quarter. This increase mirrored a broader trend in that the on-balance sheet bad debt ratio of the banking industry on the whole reached 4.94 percent by the end of May 2024, up from 4.55 percent at the end of 2023, according to the State Bank of Vietnam. 

Notably, VPBank’s bad debt ratio is higher than many other banks, largely due to its high-risk business model. Unsecured loans and real estate made up 20 percent and 22 percent of its total credit, respectively.

VPBank also holds a 50 percent stake in FE Credit, a leading Vietnamese payday lender. In 2023, FE Credit faced significant challenges due to the economic downturn, which heavily impacted its low-income customer base. As a result, FE Credit’s non-performing loans reached 20 percent and credit growth fell by 14.6 percent. 

In response, FE Credit shifted towards a lower-risk approach and tightened its lending criteria. As a result FE Credit returned to profitability in the second quarter of 2024, after reporting a US$149.4 million loss in 2023.

Disclosure: The author does not have any financial interest in VPB stock.

See also: Banking in Vietnam: Industry Overview 2024

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