VPB – Reduced Provision Pressure Boosts Profit Growth Outlook for 2024
- Q1-2024 PBT reaches VND 4.2 trillion, up 64% YoY: The growth is attributed to a 20% increase in the parent bank's PBT and a 52% YoY reduction in FE Credit's losses, achieving 18% of the full-year PBT target.
- Projected 2024 Consolidated PBT to amount to VND 20.6 trillion, up 87% YoY: This growth is primarily driven by FE Credit's projected PBT of VND 700 billion (versus a VND 3.7 trillion loss in 2023) and a 36% YoY increase in the parent bank's PBT. Key growth drivers include a 15% YoY reduction in consolidated provisioning expenses due to stricter credit policies and a 30 bps YoY expansion in the consolidated NIM to 5.9%.
- Target Price and Recommendation: Using the Residual Income and P/B valuation methods, we arrive at a target price of VND 23,100, implying a 24% total expected return (including a VND 1,000 cash dividend per share). We recommend BUY for VPB.
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