A VPBank branch. With the economy expected to return to normal by June-end, the bank hopes to beat its profit forecast for 2020. — Photo courtesy of VPBank

The Vietnam Prosperity Joint Stock Commercial Bank expects to beat the 2020 profit forecast despite the downturn caused by the COVID-19 outbreak, CEO Nguyen Duc Vinh said on Friday.

In the first quarter pre-tax profit was up 63.3 per cent year-on-year to more than VND2.9 trillion.

It increased to VND4 trillion in the first four months, and is expected to top VND5.1 trillion by May end, or 50 per cent of the year’s target, Vinh told the lender’s annual general meeting.

“Profit is expected to exceed VND6 trillion by June. The board of directors is confident the bank can beat its profit forecast by 10-12 per cent.”

The forecast was trimmed following the pandemic outbreak.

VPBank, as the lender is commonly known, sees full-year profit sliding by 1.1 per cent to VND10.214 trillion.

It also expects total assets to rise by 12.7 per cent to VND425 trillion and loans outstanding by 12.3 per cent to VND304.74 trillion.

Deposits are forecast to rise by 10.4 per cent; the non-performing loans ratio is expected to be below 3 per cent.

The board had originally eyed a 29 per cent rise in full-year profit to VND13.5-14 trillion, Vinh said.

But with COVID-19 outbreak having a severe impact on both global and Vietnamese economies, the board of directors had to amend it, he said.

“The top priority now is to ensure capital adequacy and become more resilient in the face of the economic downturn.”

The pandemic is expected to be controlled by June and economic activities are likely to revive subsequently, enabling banks and other businesses to recover, he added.

In 2019 VPBank had earned a record pre-tax profit of VND10.33 trillion after rising by 12.3 per cent.

No dividends

VPBank does not plan to pay a dividend for 2020. Its entire undistributed profit of VND7 trillion will be used to increase charter capital and fund business activities.

The board of directors also unveiled plans to buy back all international bonds in 2020 or 2021 depending on market conditions.

According to chairman Ngo Chi Dung, the bank has begun preliminary talks to sell up to 49 per cent in its consumer finance arm, FE Credit. The money from the deal will be spent on its retail and SME divisions.

VPBank shares (HoSE: VPB) rose 1.1 per cent to end Friday at VND23,350. — VNS